UBS Maintains a 'Neutral' on Dean Foods (DF); Raising Estimates, But Weary of Compressed Margins
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Price: $0.80 --0%
Rating Summary:
2 Buy, 11 Hold, 4 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
2 Buy, 11 Hold, 4 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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UBS maintains a 'Neutral' on Dean Foods (NYSE: DF) price target raised from $11 to $12.50.
UBS analyst says, "Following 4Q earnings, we are raising our FY12e to $0.94 (+22% YOY; cons $0.90) from $0.90, in order to reflect 1) better than expected volume trends (-1% YOY), 2) lower tax expense ($234M), and 3) a lower tax rate (37%). Our FY12e EPS is towards the higher end of Dean’s 2012 EPS guidance of $0.87-$0.95 (+13-24%, cons $0.89)."
"We believe that the recent improvement of implied margins augers well for the company’s near term outlook. However, the realities of a compressed margin environment and sagging industry volume trends may continue to weigh on Dean’s long-term profitability. Cost reduction efforts should help mitigate these margin pressures. However, declining fluid milk volume and increased competition may limit margin expansion despite the outlook for declining dairy input costs."
For an analyst ratings summary and ratings history on Dean Foods click here. For more ratings news on Dean Foods click here.
Shares of Dean Foods closed at $12.04 yesterday.
UBS analyst says, "Following 4Q earnings, we are raising our FY12e to $0.94 (+22% YOY; cons $0.90) from $0.90, in order to reflect 1) better than expected volume trends (-1% YOY), 2) lower tax expense ($234M), and 3) a lower tax rate (37%). Our FY12e EPS is towards the higher end of Dean’s 2012 EPS guidance of $0.87-$0.95 (+13-24%, cons $0.89)."
"We believe that the recent improvement of implied margins augers well for the company’s near term outlook. However, the realities of a compressed margin environment and sagging industry volume trends may continue to weigh on Dean’s long-term profitability. Cost reduction efforts should help mitigate these margin pressures. However, declining fluid milk volume and increased competition may limit margin expansion despite the outlook for declining dairy input costs."
For an analyst ratings summary and ratings history on Dean Foods click here. For more ratings news on Dean Foods click here.
Shares of Dean Foods closed at $12.04 yesterday.
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