Zacks Investment Research Upgrades TreeHouse Foods (THS) to “Buy”

TreeHouse Foods (NYSE:THS) was upgraded by Zacks Investment Research from a “hold” rating to a “buy” rating in a report released on Wednesday, January 31st. The firm currently has a $53.00 price target on the stock. Zacks Investment Research‘s price target points to a potential upside of 35.90% from the stock’s previous close.

According to Zacks, “Although shares of TreeHouse Foods has declined and underperformed the industry in a month, the trend is likely to reverse in the near term. Management is making attempts to enhance its operational performance and optimize cost structure through its TreeHouse 2020 strategy. Notably, this initiative is expected to improve operating margin by 300 bps by the end of 2020. Moreover, the company has been undertaking acquisitions to augment its portfolio, alongside of enhanced focus on organic food offerings. We noted that stiff competition and sluggish store traffic are making things tough for TreeHouse. This is quite evident from third-quarter 2017 results, wherein both top and bottom lines fell year over year and the latter came much below expectations. Apart from this, the divestiture of the SIF business also impacted results, by denting the top line. Additionally, higher freight and commodity costs weighed on the operating income.”

A number of other research analysts have also recently issued reports on the company. JPMorgan Chase & Co. set a $39.00 price objective on TreeHouse Foods and gave the company a “sell” rating in a research note on Wednesday, December 13th. Jefferies Group set a $100.00 price objective on TreeHouse Foods and gave the company a “buy” rating in a research note on Sunday, October 29th. Wolfe Research assumed coverage on TreeHouse Foods in a research note on Monday, December 4th. They set a “market perform” rating on the stock. TheStreet cut TreeHouse Foods from a “c-” rating to a “d+” rating in a research note on Friday, November 10th. Finally, Vertical Group raised TreeHouse Foods from a “hold” rating to a “buy” rating in a research note on Thursday, November 16th. Two research analysts have rated the stock with a sell rating, thirteen have assigned a hold rating and four have assigned a buy rating to the company’s stock. The company presently has a consensus rating of “Hold” and a consensus price target of $55.83.

TreeHouse Foods (NYSE:THS) opened at $39.00 on Wednesday. The company has a market capitalization of $2,368.14, a price-to-earnings ratio of 14.13, a P/E/G ratio of 2.30 and a beta of 0.42. The company has a debt-to-equity ratio of 1.01, a current ratio of 2.16 and a quick ratio of 0.81. TreeHouse Foods has a 12 month low of $39.00 and a 12 month high of $90.42.

TreeHouse Foods (NYSE:THS) last released its earnings results on Thursday, February 15th. The company reported $1.02 EPS for the quarter, beating the Zacks’ consensus estimate of $0.93 by $0.09. TreeHouse Foods had a positive return on equity of 6.61% and a negative net margin of 4.06%. The business had revenue of $1.70 billion for the quarter, compared to analysts’ expectations of $1.70 billion. During the same quarter in the prior year, the firm earned $1.14 earnings per share. The firm’s revenue was down 4.3% on a year-over-year basis. equities analysts forecast that TreeHouse Foods will post 2.73 EPS for the current year.

TreeHouse Foods declared that its board has initiated a stock buyback plan on Thursday, November 2nd that allows the company to buyback $400.00 million in shares. This buyback authorization allows the company to purchase shares of its stock through open market purchases. Stock buyback plans are typically a sign that the company’s board believes its shares are undervalued.

In other news, CEO Sam K. Reed sold 11,480 shares of TreeHouse Foods stock in a transaction that occurred on Monday, January 8th. The shares were sold at an average price of $49.72, for a total transaction of $570,785.60. Following the completion of the transaction, the chief executive officer now directly owns 81,147 shares in the company, valued at $4,034,628.84. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available through the SEC website. Also, VP Thomas Emmet Oneill III sold 2,000 shares of TreeHouse Foods stock in a transaction that occurred on Tuesday, December 5th. The shares were sold at an average price of $45.32, for a total transaction of $90,640.00. Following the transaction, the vice president now owns 135,019 shares of the company’s stock, valued at $6,119,061.08. The disclosure for this sale can be found here. Insiders have sold 36,440 shares of company stock valued at $1,680,850 over the last quarter. Company insiders own 3.50% of the company’s stock.

Several institutional investors and hedge funds have recently made changes to their positions in THS. Citigroup Inc. increased its position in shares of TreeHouse Foods by 120.6% during the second quarter. Citigroup Inc. now owns 1,286 shares of the company’s stock valued at $105,000 after acquiring an additional 703 shares in the last quarter. Balter Liquid Alternatives LLC bought a new stake in TreeHouse Foods in the 4th quarter worth approximately $174,000. State of Alaska Department of Revenue bought a new stake in TreeHouse Foods in the 4th quarter worth approximately $197,000. ZWJ Investment Counsel Inc. bought a new stake in TreeHouse Foods in the 3rd quarter worth approximately $212,000. Finally, Zions Bancorporation bought a new stake in TreeHouse Foods in the 3rd quarter worth approximately $212,000.

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TreeHouse Foods Company Profile

TreeHouse Foods, Inc is a consumer packaged food and beverage manufacturer. The Company’s segments include North American Retail Grocery, Food Away From Home, and Industrial and Export. The Company manufactures a range of shelf stable, refrigerated, fresh and frozen products. Its product categories include beverages, salad dressings, snack nuts, beverage enhancers, pickles, sauces, cereals, pasta and dry dinners, cookies and crackers, retail bakery, aseptic products, jams and other products.

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