Strong Buy on Flowers Foods - Analyst Blog
26 Marzo 2013 - 11:10AM
Zacks
On Mar 22, Zacks Investment Research upgraded Flowers
Foods Inc. (FLO) to a Zacks Rank #1 (Strong Buy). Shares
of this bakery products producer have amassed an impressive return
of 58.1% in the last six months.
Why the Upgrade?
Flowers Foods has been witnessing rising earnings estimates on the
back of better-than-expected fourth-quarter 2012 results. The
bakery goods producer’s earnings per share surpassed the Zacks
Consensus Estimate for the first time after reporting in line
earnings in 3 consecutive quarters. Moreover, we believe that the
company’s strategy of expanding continuously through entering new
markets, building new bakeries and acquisitions have helped induce
an upward movement in the estimates.
Flowers Foods declared impressive results on Feb 7, 2013, wherein
earnings of 28 cents a share surpassed the Zacks Consensus Estimate
of 25 cents by 12.0%, and rose 64.7% from the year-ago quarter.
Net sales jumped 14.7% over the prior-year quarter to $749.4
million, and came ahead of the Zacks Consensus Estimate of $709
million. Volume increased of 10.3%, while net price/mix remained
unfavorable at 2.0%. Gross margin expanded 200 basis points to
47.9%, benefiting from higher sales volumes and improved
manufacturing efficiencies.
Further, the company has successfully expanded its reach of fresh
bakery products from about 38% of U.S. population in 2004 to more
than 70% now. Moreover, the company has a proven experience of
integrating acquisitions, having completed more than 100 since 1968
and three significant ones in just the last three years – Tasty
Baking, Lepage Bakeries, and the Sara Lee and Earthgrains brands in
California.
The Zacks Consensus Estimate for fiscal 2013 increased 1.6% to
$1.28 per share as most of the estimates were revised higher over
the last 30 days. Moreover, for fiscal 2014, the estimates were
revised higher over the same time frame, lifting the Zacks
Consensus Estimate by 5.8% to $1.46 per share.
Other Stocks to Consider
Besides Flowers Foods, other stocks in the foods industry that are
currently performing well include J&J Snack Foods
Corp. (JJSF), which has a Zacks Rank #1 (Strong Buy),
ConAgra Foods Inc. (CAG) and Kraft Foods
Group Inc. (KRFT), both of which hold a Zacks Rank #2
(Buy).
CONAGRA FOODS (CAG): Free Stock Analysis Report
FLOWERS FOODS (FLO): Free Stock Analysis Report
J&J SNACK FOODS (JJSF): Free Stock Analysis Report
KRAFT FOODS GRP (KRFT): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
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