|
|
MDU Resources Group Inc.
|
 |
||||||||
|
 |
  |
 |
|
|
||
 |
 |
 
|
return to message board, top of board |
Kraft Heinz, Smucker & Campbell: Three Unappetizing Choices From Barron's Kraft Heinz, Smucker & Campbell: Three Unappetizing ChoicesBy Teresa Rivas Packaged food has been stale for a while, and it may not be more appetizing anytime soon for major sector players such as Kraft Heinz (KHC), Smucker (SJM), and Campbell Soup (CPB), warns Credit Suisse. Analyst Robert Moskow put out a trio of bearish reports on the companies on Monday, warning that each faces challenges as consumer staples in general have lagged. Moskow downgraded Kraft Heinz to Underperform and lowered his price target to $55 from $77. The stock has already come down "considerably" this year, but it still has further to fall, as Moskow expects consensus revenue and profit estimates will be revised lower. The analyst has "serious doubts" about management's ability to generate sufficient product innovation to grow its collection of “retro” brands in an increasingly competitive environment. While the company will find another M&A target at some point, there aren't any attractive options on the field at the moment. Moskow also downgraded Smucker to Underperform, shaving $5 off his price target, to $115. He argues despite the company's leading brands in coffee and pet food, shifting consumer preferences are threatening its legacy brands, and making Smucker less competitive. He expects margins will shrink as Smucker spends money on promotions and R&D to offset this pressure, and estimates that a sale of its declining Pillsbury brand could lead to as much as 25 cents in earnings-per-share dilution--if it can find a buyer. Finally, Moskow resumed coverage of Campbell with an Underperform rating and $40 price target following the completion of the Snyder’s-Lance acquisition, which brings "two struggling companies" together. He writes that Campbell's high-margin soup and V8 beverage businesses are in decline, while Snyder is suffering from "major supply-chain deficiencies," leading him to be skeptical of the combined company, especially given "Campbell’s poor track record for integrating acquisitions." Kraft Heinz is down 0.9% to $60.39 this morning, while Smucker is 2.5% lower to $119.79. However, Campbell is up 1.4% to $43.05. The Consumer Staples Select Sector SPDR ETF (XLP) is up 0.6% to $52.88. |
|
|
return to message board, top of board |
