|Bid||44.2600 x 300|
|Ask||44.2700 x 400|
|Day's range||43.5400 - 44.3550|
|52-week range||43.1800 - 60.6900|
|PE ratio (TTM)||11.83|
|Earnings date||26 Jun 2018 - 2 Jul 2018|
|Forward dividend & yield||1.96 (4.38%)|
|1y target est||49.89|
Kraft Heinz (KHC) fell 5% this past week after Credit Suisse downgraded it from Outperform to Underperform. Philip Morris International (PM) dropped almost 16% on Thursday after reporting that its answer to falling smoking rates, a smokeless tobacco system called iQOS, might peak sooner than expected in Japan. Consider General Mills (GIS), which has fallen 27% so far this year, to humble levels relative to earnings.
Analysts expect Hershey (HSY) to post adjusted earnings per share (or EPS) of $1.41 in 1Q18, which reflects year-over-year (or YoY) improvement of 7.6%. The expected earnings also reflect sequential improvement as Hershey’s EPS fell 12.0% YoY in 4Q17. Hershey’s 4Q17 bottom line took a hit from weak volumes and higher costs, and unfavorable mix provided further pressure.
Hershey (HSY) is expected to announce its 1Q18 results on April 26, 2018. Analysts expect the company’s sales and EPS (earnings per share) to show YoY (year-over-year) improvement. However, persistent challenges could dent the company’s financials.
Most analysts have maintained a neutral outlook on McCormick (MKC) stock given the tough retail environment and the company’s high debt after its RB Foods acquisition. The rise of private label products also remains a concern.
Whereas most US packaged food manufacturers are struggling to stabilize their margins amid soft sales and manufacturing and logistic cost inflation, McCormick (MKC) has managed to expand its margins at a healthy rate.
McCormick’s (MKC) top-line growth has improved significantly over the past two quarters, thanks to incremental sales of its acquired brands, which contributed more than half of this growth. During the last reported quarter, McCormick’s acquired brands, Giotti and RB Foods, added ~2.4% to its overall sales growth of 19%.
McCormick (MKC) has seen double-digit sales and earnings growth over the past couple of quarters, and analysts expect the company’s top and bottom lines to mark double-digit growth in fiscal 2018.
J.M. Smucker joins the list of companies taking a deep dive into the pet food and pet care market, one that is growing.
Shares of General Mills (GIS) had a difficult start to 2018, and last month had their worst day in nearly a decade after reporting earnings, as investors are already skeptical about the price and strategy of the company's Blue Buffalo Pet Products (BUFF) acquisition. First, General Mills' top-line recovery "is real and should not be overlooked." Second, he believes that its margin disappointment is addressable.
Deere could be among the big losers in a China trade war as Beijing targets U.S. agriculture, but the prospect of lower prices also boosted Hormel and other food companies.
Investors who’ve been sitting on cash and waiting for a big stock selloff haven’t quite gotten one. General Mills (GIS) Price change since Jan. 26: -25% Forward price/earnings ratio: 14 As recently as 2016 investors were paying a 20% to 30% premium to the broad market for General Mills shares, based on forward price/earnings ratios.
SoftBank, Campbell’s Soup, Whole Foods and Remington are the companies to watch.
General Mills' focus on new product lineup, keeping the organic food preference in mind, bodes well. However, higher input, freight and manufacturing costs are going to weigh on its margins.