Credit Suisse Downgrades B&G Foods (BGS) to Underperform
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Credit Suisse analyst Robert Moskow downgraded B&G Foods (NYSE: BGS) from Neutral to Underperform with a price target of $25.00 (from $28.00).
The analyst comments "B&G’s brands have performed extraordinarily well during the pandemic because so many of them are used for preparing meals at home. Forty percent of sales come from meal components (vegetables, beans, and taco shells), 30% from enhancers (e.g. salsa, spices, and pasta sauce), and 15% from baking on a pro forma basis. But, this also means that the portfolio is the most likely to experience major sales declines once consumers return to their prior eating patterns away from their homes. The recent acquisition of the oils and shortening brand, Crisco, increases B&G’s exposure to “normalcy” even further because Crisco was declining at a 5% rate prior to the pandemic due to stagnant baking trends and consumers shifting to healthier options. In total, we expect an organic sales decline of 8% in 2021 and 3% in 2022 as consumer gain access to vaccines and return to normal mobility. "
Shares of B&G Foods closed at $27.47 yesterday.
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