On the positive side, Diamond Foods management stressed on a conference call with investors that restatements and 2012 earnings remove a cloud of uncertainty and will help the company focus on the future and growing its popular up-market snacks brands once more. Meanwhile, Diamond Foods also has a "runway" to turn its earnings around, after the company reached a forbearance agreement with syndicate of bank lenders by Bank of America ( BAC), which removes restrictive loan covenant and gives management the flexibility to re-position the company. Already, interim Diamond Foods management laid out a restructuring of the firm's Emerald and Kettle snack brands, which may help the company's long-term earnings. Thilo Wrede, an analyst with Jefferies, wrote in a note to clients that while Diamond Foods earnings helps to remove some uncertainty, they also raise the prospect that profits will continue to fall - making valuation a tough exercise. "Instead of driving growth through promotions and discounting, gains for both brands are supposed to come more from innovation, equity building measures and price increases to position them clearly in the premium segment, thereby enhancing the attractiveness for certain consumer segments," writes Wrede, of Diamond Foods new Emerald and Kettle strategies. While Wrede says the approach may grow margins over time, it might pressure the company during a transition that will likely last for many quarters. "While we are still in the process of updating our model and reviewing our outlook for the company, we believe that a reduced growth outlook, even if at least partially offset by a better margin picture, will continue to pressure valuation for the stock - at least for the time being," wrote Wrede in a not to clients that maintained a 'Hold' rating and $27 price target. Before calculating a new valuation, the analyst said Diamond Foods needs to give more visibility on its earnings, supply costs and profit margin outlook. Wrede did note that after a sharp share price drop, Diamond Foods valuation implies a 12.8x enterprise value to EBITDA multiple - when counting the dilution of Oaktree's warrants - which is in line with competitors like Hershey's ( HSY).