In a report released today, Pablo Zuanic from Susquehanna reiterated a Hold rating on TreeHouse Foods (NYSE: THS), with a price target of $41. The company’s shares closed yesterday at $47.34.
Zuanic commented:
“We are cutting our estimates to the low end of guidance to reflect the sales and EBIT margin impact from the loss of a sizable coffee contract late in 2017. Yes, we realize the broad guidance range for 2H18, both for sales and EPS, seems to factor in this contract loss (in addition to the impact from ongoing SKU cuts). There is no guidance for 2019 yet, but we also worry repricing of other coffee contracts (to avoid further business erosion) may be a drag on margins next year (partly offsetting efficiency gains elsewhere). Our new FY18 EPS is $2.04 vs. $2.18 before (guidance $2.05-2.35; consensus $2.15). Because of uncertainty re 2020, we prefer to value the stock as of December ’18 on our CY19 estimates; we continue to take a 10% discount vs. consumer staples, which implies a $41 share price by year-end (vs. $46 before).”
According to TipRanks.com, Zuanic is a 4-star analyst with an average return of 5.1% and a 46.0% 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.
The word on The Street in general, suggests a Hold analyst consensus rating for TreeHouse Foods with a $49.67 average price target.
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Based on TreeHouse Foods’ latest earnings release for the quarter ending June 30, the company reported a quarterly GAAP net loss of $20.1 million. In comparison, last year the company had a net profit of $28.8 million.
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TreeHouse Foods, Inc. is a food manufacturer servicing primarily in retail grocery and foodservice channels. Its products include non dairy powdered creamers and sweeteners; condensed, ready to serve, and powdered soups; refrigerated and shelf stable salad dressings and sauces; powdered drink mixes; single serve hot beverages; specialty teas; hot and cold cereals; macaroni and cheese, skillet dinners and other value added side dishes and salads; salsa and Mexican sauces; jams and pie fillings; pickles and related products; aseptic sauces; and liquid non dairy creamer. The company operates through three business segments: North American Retail Grocery, Food Away From Home and Industrial and Export. The North American Retail Grocery segment sells branded and private label products to customers within the United States and Canada. These products include non-dairy powdered creamers, condensed and ready to serve soups, broths and gravies, salad dressings and sauces, pickles and related products, Mexican sauces, jams and pie fillings, aseptic products, liquid non-dairy creamer, powdered drinks, hot cereals, macaroni and cheese and skillet dinners. The Food Away From Home segment sells non-dairy powdered creamers pickles and related products, Mexican sauces, refrigerated dressings, aseptic products and hot cereals to foodservice customers, including restaurant chains and food distribution companies, within the United States and Canada. The Industrial and Export segment includes co pack business and non dairy powdered creamer sales to industrial customers for use in industrial applications, including products for repackaging in portion control packages and for use as ingredients by other food manufacturers, pickles and related products, Mexican sauces, infant feeding products and refrigerated dressings. Export sales are primarily to industrial customers outside of North America. The company was founded on January 25, 2005 and is headquartered in Oak Brook, IL.
