DA Davidson Starts Hillshire Brands (HSH) at Neutral; From 'Hog Cycle' To Potential Takeover Target

DA Davidson initiates coverage on Hillshire Brands (NYSE: HSH) with a Neutral. PT $28.00.

Analyst, Timothy S. Ramey, said, "With Sara Lee (NYSE: SLE) trading “x” the $3 dividend and CoffeeCo on Friday, we are initiating coverage on Hillshire Brands, the successor company, with a NEUTRAL."

Ramey's bearish points include: 1) Fourth management team in 10 years, claiming all predecessors underperformed...can the current team right the ship; 2) 'Hog Cycle' hasn't been addressed, but Hillshire will likely face same compression as Tyson (NYSE: TSN) and Hormel (NYSE: HRL); and 3) Lack of guidance or restated historical financial information, especially given that SLE spent so much time and money preparing for the separation.

On the bullish side, Ramey thinks that HSH could be an attractive takeover target by the likes of Hormel or Smithfield (NYSE: SFD). However, currently he thinks the company is fairly valued

For an analyst ratings summary and ratings history on Hillshire Brands click here. For more ratings news on Hillshire Brands click here.

Shares of Hillshire Brands closed at $0.08 yesterday.

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