In a report released today, Akshay Jagdale from Jefferies maintained a Buy rating on Dean Foods Co (NYSE: DF), with a price target of $13. The company’s shares closed yesterday at $7.54, close to its 52-week low of $7.51.
Jagdale wrote:
“Despite 2Q results that were generally in line with expectations, mgmt. lowered its FY18 EPS outlook as it expects a pick-up in non-dairy COGS inflation, comp. pressures, & delay in network optimization plans to weigh on 2H18 results. We continue to believe the cost savings opportunity is significant & should over the LT more than offset the secular & transitory headwinds that have driven the disappointing results in recent quarters. We maintain our Buy rating. Significant untapped margin enhancement opportunity exists but the execution needs to improve. G&A reductions have taken hold rapidly with ~$26M y/ y savings in G&A in 1H18, primarily driven by a reduction in headcount and employee- related expenses.”
According to TipRanks.com, Jagdale is a 4-star analyst with an average return of 4.1% and a 52.8% success rate. Jagdale covers the Consumer Goods sector, focusing on stocks such as Lamb Weston Holdings, McCormick & Company, and J & J Snack Foods.
Dean Foods Co has an analyst consensus of Hold, with a price target consensus of $9.33.
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Based on Dean Foods Co’s latest earnings release for the quarter ending June 30, the company reported a quarterly GAAP net loss of $42.02 million. In comparison, last year the company had a net profit of $17.65 million.
Based on the recent corporate insider activity of 60 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of DF in relation to earlier this year.
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Dean Foods Co. engages in the manufacture, sale, and direct-to-store distribution of fluid milk and other dairy and dairy case products. Its portfolio includes the DairyPure and TruMoo brands, along with other regional dairy brands such as Alta Dena, Berkeley Farms, Country Fresh, Dean’s, Friendly’s, Garelick Farms, LAND O LAKES milk and cultured products, Lehigh Valley Dairy Farms, Mayfield, McArthur, Meadow Gold, Oak Farms, PET, T.G. Lee, and Tuscan. The company was founded by Samuel E. Dean, Sr. in 1925 and is headquartered in Dallas, TX.
