UBS on American Food Products: Are the Worst Volume Declines Behind Us? Channel Checks Indicate...
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Today's Overall Ratings:
Up: 11 | Down: 12 | New: 13
Rating Summary:
7 Buy, 21 Hold, 2 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 11 | Down: 12 | New: 13
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UBS on American Food Products: Are the Worst Volume Declines Behind Us? Channel Checks Saying Something
Analyst, David Palmer, said, "Despite a moderation of volume declines in the latest 4 weeks, in our view, there are still plenty of reasons to worry about the food space in terms of domestic margin performance. In particular, measured channel volume declines on a trailing 12 week basis remain severe for several domestic companies (e.g. General Mills (NYSE: GIS), ConAgra (NYSE: CAG), Campbell (NYSE: CPB), Heinz (NYSE: HNZ)). That said, our hunch is that volume declines may have bottomed, and are poised to improve as food inflation rolls over in the coming months. We believe that signs of improving baseline volume trends could set the stage for more substantial margin and earnings growth by the end of calendar 2012."
Palmer does note that being global has been a buffer to U.S. declines and Kraft (NYSE: KFT) and Heinz are offsetting near-term risk. Hain (Nasdaq: HAIN) and Hershey (NYSE: HSY) are still seeing domestic momentum,
UBS raised FY12 EPS on HAIN from $1.75 to $1.77 and price target from $40 to $45.
UBS raises Dean Foods (NYSE: DF) FY12 EPS estimate from $0.94 to $0.98 and price target by $1 to $13.50.
Analyst, David Palmer, said, "Despite a moderation of volume declines in the latest 4 weeks, in our view, there are still plenty of reasons to worry about the food space in terms of domestic margin performance. In particular, measured channel volume declines on a trailing 12 week basis remain severe for several domestic companies (e.g. General Mills (NYSE: GIS), ConAgra (NYSE: CAG), Campbell (NYSE: CPB), Heinz (NYSE: HNZ)). That said, our hunch is that volume declines may have bottomed, and are poised to improve as food inflation rolls over in the coming months. We believe that signs of improving baseline volume trends could set the stage for more substantial margin and earnings growth by the end of calendar 2012."
Palmer does note that being global has been a buffer to U.S. declines and Kraft (NYSE: KFT) and Heinz are offsetting near-term risk. Hain (Nasdaq: HAIN) and Hershey (NYSE: HSY) are still seeing domestic momentum,
UBS raised FY12 EPS on HAIN from $1.75 to $1.77 and price target from $40 to $45.
UBS raises Dean Foods (NYSE: DF) FY12 EPS estimate from $0.94 to $0.98 and price target by $1 to $13.50.
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