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Citigroup Gives B&G Foods a ‘Neutral’ Rating

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Price movement

B&G Foods (BGS) rose 1.6% to close at $44.55 per share during the third week of December 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were 1.6%, 4.2%, and 31.1%, respectively, as of December 23.

BGS is trading 2.0% above its 20-day moving average, 1.7% above its 50-day moving average, and 2.9% above its 200-day moving average.

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Related ETF and peers

The Vanguard Small-Cap ETF (VB) invests 0.11% of its holdings in BGS. The YTD price movement of VB was 18.8% on December 23.

The market caps of BGS’s competitors are as follows:

  • General Mills (GIS): $37.3 billion
  • JM Smucker (SJM): $14.9 billion
  • TreeHouse Foods (THS): $4.2 billion

BGS’s rating

On December 19, 2016, Citigroup initiated coverage of B&G Foods with a “neutral” rating and set the stock’s price target at $46 per share.

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Performance of B&G Foods in 3Q16

B&G Foods reported 3Q16 net sales of $318.2 million, a rise of 49.2% compared to $213.3 million in 3Q15. The company’s gross profit margin and operating margin rose 270 basis points and 240 basis points, respectively, in 3Q16 compared to 3Q15.

BGS’s net income and EPS (earnings per share) rose to $32.4 million and $0.50, respectively, in 3Q16 compared to $19.8 million and $0.34, respectively, in fiscal 3Q15. It reported adjusted EPS of $0.56 in 3Q16, a rise of 43.6% compared to 3Q15.

BGS’s inventories and trade accounts receivable rose 9.1% and 30.0%, respectively, in 3Q16 compared to 4Q15. It reported cash and cash equivalents of $240.6 million in 3Q16 compared to $5.2 million in 4Q15.

Quarterly dividend

B&G Foods (BGS) declared a quarterly cash dividend of $0.47 per share on its common stock. The dividend will be paid on January 30, 2017, to shareholders of record on December 30, 2016.

Projections

B&G Foods made the following projections for 2016:

  • net sales of $1.38 billion–$1.40 billion
  • adjusted EBITDA[1. earnings before interest, tax, depreciation, and amortization] of $322.0 million–$328.0 million
  • adjusted EPS of $2.11–$2.17

In the next part of this series, we’ll take a look at Carter’s (CRI).

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