Goldman upgraded Dean Foods to buy from hold, noting the company's potential for higher margins and gradual de-leveraging.
"We believe margins have now troughed and we see a path to margin recovery over the next few years, which should drive outsized profit growth," noted analyst Judy Hong.
"Given the improved pricing environment, we now have more confidence that
Dean Foods now expects to earn between 67 and 75 cents per share this year, up from its prior outlook for a profit of 55 to 65 cents per share. The guidance came in far ahead of analysts' call for 2011 earnings of 58 cents per share.
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