Analysts Ken Goldman and Anoori Naughton made the move because with more people staying home due to the coronavirus, they are more likely to eat at home. And that means more demand for TreeHouse products.
Comments from TreeHouse Chief Executive Steve Oakland and Chief Financial Officer Bill Kelley on the Oak Brook, Ill., company’s earnings call last month convinced the analysts that TreeHouse will benefit from consumers' reaction to the virus outbreak, they wrote in a report, according to Dow Jones.
"The tone was constructive," the analysts said. TreeHouse’s non-perishables, such as pasta and canned goods, should attract strong interest, Goldman and Naughton said.
Meanwhile, workers and raw materials are in ample supply, so the company's supply chain shouldn’t feel pressure, they said.
In addition, TreeHouse purchases very little of its ingredients from Asia, which is ground zero for the coronavirus.
More than 121,000 people have contracted the coronavirus, and more than 4,300 of them have died. President Donald Trump has promised to announce on Wednesday a fiscal-stimulus package to blunt the economic impact of the virus.
In the fourth quarter Treehouse swung to net income of $15.5 million, or 27 cents a share, from a loss of $13.9 million, or 25 cents, in the year-earlier quarter. Revenue totaled $1.14 billion, down from $1.19 billion.
At last check the company’s stock was up 0.2% at $37.39. The shares on Wednesday have traded up as much as 3.8% and down as much as 2.3%.