Pinnacle Foods (PF) Stock Higher, BMO Capital Raises Price Target
NEW YORK (TheStreet) -- Shares of Pinnacle Foods (PF) are up by 1.19% to $48.36 in early-afternoon trading on Wednesday, as the company's price target was raised to $56 from $50 at BMO Capital this morning.
The price increase comes as Pinnacle Foods continues to be the firm's "top pick" for 2016 due to "visibility toward our higher-than-consensus 2017 EPS estimate driven by Bouldersynergies; 2) the sustainability and potential acceleration of its growth algorithm led by superior execution (sales growth, ongoing productivity); and 3) PF's all-time-high discount to its US peers (10%)."
Now is a good entry point for Pinnacle Foods because of the uneasiness over the new CEO, softened initial 2016 guidance and repressed talk of acquisition, BMO said.
Although Pinnacle has competitors in the slow-growth grocery/frozen foods, the Parsippany-Troy Hills, NJ-based packaged foods company is able to stand out with its "ability to drive sustainable growth with top-tier top-line growth (as opposed to restructuring-based cost-savings programs)," the firm noted.
Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate PINNACLE FOODS INC as a Buy with a ratings score of B. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, good cash flow from operations and solid stock price performance. We feel its strengths outweigh the fact that the company has had sub par growth in net income.
You can view the full analysis from the report here: PF
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