Update (9:40 a.m.): Updated with Monday market open information.
NEW YORK (TheStreet) -- RBC Capital Markets upgraded B&G Foods (BGS) to "outperform" from "sector perform" and set a $36 target price. The firm also increased its estimates given the Specialty Brands acquisition.
The stock was up 0.38% to $31.69 at 9:39 a.m. on Monday.
Separately, TheStreet Ratings team rates B&G FOODS INC as a "buy" with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate B&G FOODS INC (BGS) a BUY. This is driven by multiple 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, increase in net income, growth in earnings per share and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 1.9%. Since the same quarter one year prior, revenues rose by 21.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Food Products industry average. The net income increased by 96.6% when compared to the same quarter one year prior, rising from $9.56 million to $18.79 million.
- B&G FOODS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, B&G FOODS INC reported lower earnings of $0.98 versus $1.21 in the prior year. This year, the market expects an improvement in earnings ($1.56 versus $0.98).
- Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
- The debt-to-equity ratio is very high at 2.30 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. To add to this, BGS has a quick ratio of 0.66, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
- You can view the full analysis from the report here: BGS Ratings Report