Analysts Offer Insights on Consumer Goods Companies: Freshpet (NASDAQ: FRPT) and Tower Semiconductor (NASDAQ: TSEM)

Companies in the Consumer Goods sector have received a lot of coverage today as analysts weigh in on Freshpet (NASDAQ: FRPT) and Tower Semiconductor (NASDAQ: TSEM).

Freshpet (NASDAQ: FRPT)

Susquehanna analyst Pablo Zuanic maintained a Hold rating on Freshpet (NASDAQ: FRPT) today and set a price target of $17. The company’s shares closed yesterday at $19.80.

Zuanic wrote:

“Sales growth of 28% represented acceleration, and was above consensus of +25%. Although gross margin pressures persisted and the ad spend ramp-up is slated to last for the full year, adjusted EBIT margins were actually better than consensus by 300bp. The company maintained the full-year targets. However, 2Q should continue to see gross margin pressures, which implied a steeper recovery should be needed in 2H for the company to deliver the annual targets. Taking into account the recent run-up in the stock, despite the beat, we’d expect the stock to tread water at best, as new positive catalysts may not play out until the late fall. Sales comps are 10 points tougher starting in 2Q, and with the company still spending all gross profit in SGA, we worry about a top-line slowdown once A&P has to start easing. We maintain our Neutral stance. Our December ’18 price target is now $17 vs. $16 before.”

According to TipRanks.com, Zuanic is a 3-star analyst with an average return of 3.7% and a 51.4% success rate. Zuanic covers the Consumer Goods sector, focusing on stocks such as Coca-Cola European Partners, Constellation Brands Inc, and Anheuser-Busch Inbev Sa.

Currently, the analyst consensus on Freshpet is Moderate Buy and the average price target is $20.67, representing a 4.4% upside.

In a report released yesterday, Oppenheimer also assigned a Hold rating to the stock.

See today’s analyst top recommended stocks >>

Tower Semiconductor (NASDAQ: TSEM)

In a report released today, Cody Acree from Drexel Hamilton reiterated a Buy rating on Tower Semiconductor (NASDAQ: TSEM), with a price target of $46. The company’s shares closed yesterday at $25.

Acree wrote:

“We believe the miss is almost exclusively related to softness in the smartphone market, where Tower’s RF SOI switches generate ~20% of revenue. We also believe a portion of the company’s power management products end up in handsets, although the percentage is unclear. We estimate that Apple accounts for about 10%, or more, of Tower’s revenue, which fluctuates based on seasonality. We also believe a portion of the guidance softness was caused by the recent trade ban against ZTE. While mobile was the primary cause of the revenue shortfall and weaker than expected guidance, Tower did say that it was already beginning to see mobile demand improvements.”

According to TipRanks.com, Acree is a 5-star analyst with an average return of 20.7% and a 69.8% success rate. Acree covers the Consumer Goods sector, focusing on stocks such as Silicon Laboratories, NXP Semiconductors, and Skyworks Solutions.

Tower Semiconductor has an analyst consensus of Moderate Buy, with a price target consensus of $48.

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