Sara Lee Analyst Upgrades Rating to Hold
Argus analyst Erin Smith said in a research note that she had been concerned that Sara Lee wouldn't be able to find buyers for the businesses it wanted to sell following the resignation of CEO Brenda Barnes, who initiated and led the company's portfolio repositioning to focus on its core meats and beverage businesses.
"However, the past few months have proven otherwise," she said.
Smith noted that during this period, Sara Lee has either completed or announced deals to sell almost all its household and body care businesses, and its North American Fresh Bakery business, both of which were underperforming segments."We believe that these asset sales will help the company to focus on its higher-margin, higher-growth businesses." Still, Smith cautioned that she expects the company's near-term sales and earnings growth to be limited by company-specific and industry-wide factors, including renewed cost inflation for coffee and other products. She added that the company also expects difficult year-over-year comparisons in the second quarter and continued challenges in markets such as Spain and the Netherlands.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV