Constellation Brands’ Valuation after Fiscal 2Q18 Results
Constellation Brands’ (STZ) 12-month forward PE (price-to-earnings) ratio fell 1.4% to 24.0x on October 5, 2017, the day the company announced its fiscal 2Q18 results.
As of October 6, 2017, 13 of the 19 analysts (or 68.0%) covering Constellation Brands (STZ) stock had “buy” ratings for the stock. Six analysts recommended a “hold.”
Constellation Brands’ (STZ) gross margin increased to 51.1% in fiscal 2Q18 from 47.9% in fiscal 2Q17.
Why Food Stocks Aren’t Cooking
So far this year, food stocks have largely disappointed investors, and the outlook for the rest of the year appears no better. Stock prices for food manufacturers have been on a downtrend, underperforming the S&P 500 Index (SPX-INDEX) on a YTD (year-to-date) basis, as the graph below shows. As of July 3, Campbell Soup (CPB), General Mills (GIS), Conagra Brands (CAG), J. M. Smucker (SJM), Kellogg (K), and Kraft Heinz (KHC) have fallen 13.7%, 10.7%, 10.2%, 7.7%, 6.7%, and 3.3%, respectively, YTD. The S&P 500 Index has returned 8.5% during the same period.
On average, cotton futures traded lower week-over-week for the week ended June 23, 2017.
During the week ended June 23, 2017, orange juice futures, or FCOJ-A near-month futures prices, ended in negative territory week-over-week.
Why Analysts Are Positive on Mondelēz International Stock
Most of the analysts providing ratings on Mondelēz International (MDLZ) are maintaining a positive outlook on the stock.
Mondelēz International’s (MDLZ) profit margins are benefiting from reduced overhead and advertising costs despite lower sales.
Analysts expect Mondelēz International’s (MDLZ) sales to rebound in 3Q17. They’re projecting sales of $6.5 billion, a 1.0% rise on a YoY (year-over-year) basis.
Is Target Poised to Grow?
Target (TGT) isn’t shying away from making upfront investments to accelerate its sales growth.
Target (TGT) is expanding its small-format store base and expects to open 28 new small-format stores this year.
Target’s price investment and higher costs associated with online orders are hurting its margins, which restricts the stock’s upside potential.
Where Coca-Cola’s Valuation Stands before Its 3Q17 Results
On October 18, Coca-Cola (KO) was trading at 12-month forward PE (price-to-earnings) ratio of 24.3x.
On October 18, Coca-Cola (KO) stock was rated as a “hold” by 15 of 26 analysts (or 58.0%).
Coca-Cola (KO) has exceeded analysts’ earnings expectations in eight out of the past ten quarters. In 2Q17, Coca-Cola’s earnings fell 1.7% on a year-over-year basis.
Reading SuperValu’s Northcoast Research Downgrade
SVU was downgraded by Northcoast Research to “neutral” from a “buy” rating on October 19. Four other firms lowered their target prices the same day.
Despite SuperValu (SVU) better-than-expected EPS (earnings per share) and 35% top-line growth in fiscal 2Q18, investors remained unimpressed.
SuperValu (SVU) reported adjusted EPS from continuing operations of $0.46 for fiscal 2Q18, compared with its EPS of $o.21 in fiscal 2Q17.