Pinnacle Foods (PF) released its earnings for 4Q15 and full-year 2015. Wall Street analysts provide their target prices for the next 12 months after the earnings results. The results show that 53% of analysts rate Pinnacle Foods a “buy” and ~47% rate it a “hold.”
Consensus rating for Pinnacle Foods
The average broker target price for Pinnacle Foods is $48.36. This represents a 12% rise—compared to the closing price of $43.27 on February 26. The company’s peers Treehouse Foods (THS), Lancaster Colony (LANC), and J&J Snack Foods (JJSF) have average broker target prices of $96.4, $111.3, and $108, respectively. These figures imply returns of 12.8%, 9.9%, and -2.3%, respectively, in the next 12 months. The PowerShares DWA Consumer Staples Momentum Portfolio (PSL) invests 2.5% of its holdings in Pinnacle Foods, 2.9% of its holdings in J&J Snack Foods, and 2.5% of its holdings in Lancaster Colony.
Recommendations for Pinnacle Foods
RBC Capital Markets and Stephens gave Pinnacle Foods the highest target price of $52. This represents a 20% rise compared to the closing price on February 26. RBC Capital Markets and Stephens both rate the stock a “strong buy.” The second-highest target price for Pinnacle Foods for the next 12 months is $50. This is 15% higher than the current trading price assigned by BMO Capital Markets, Goldman Sachs, CL King & Associates, Credit Suisse, and Consumer Edge Research. All of them rate the stock a “strong buy” except for Goldman Sachs. It rates Pinnacle Foods a “hold.” Barclays also rates the stock a “strong buy” with expectations for it to rise by 13% in the next 12 months.
Morgan Stanley rates Pinnacle Foods a “hold.” It assigned Pinnacle Foods the lowest target price of $45. This is 4% higher than the closing price on February 26. Pinnacle Foods also received a “hold” rating from D.A. Davidson & Co, Stifel, Buckingham Research Group. However, Stifel didn’t provide target prices for the stock.
In the next part, we’ll discuss how much the company’s margins benefited for the quarter and why.