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What’s the Latest News on Pinnacle Foods?

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Jan. 25 2017, Updated 9:08 a.m. ET

Price movement

Pinnacle Foods (PF) has a market cap of $6.3 billion. It fell 0.06% to close at $53.26 per share on January 23, 2017. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were 0.38%, 2.0%, and -0.36%, respectively, on the same day.

PF is trading 0.06% below its 20-day moving average, 4.0% above its 50-day moving average, and 11.2% above its 200-day moving average.

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Related ETF and peers

The PowerShares DWA Consumer Staples Momentum Portfolio ETF (PSL) invests 3.5% of its holdings in Pinnacle Foods. The YTD price movement of PSL was 1.3% on January 23.

The market caps of Pinnacle Foods’s competitors are as follows:

  • Mondelēz International (MDLZ) — $69.9 billion
  • General Mills (GIS) — $36.6 billion
  • ConAgra Foods (CAG) — $17.0 billion

PF’s rating

On January 23, 2017, Moody’s reported, “Moody’s Investors Service, Inc. (“Moody’s”) today assigned a Ba2 rating to Pinnacle Foods Finance LLC’s (“Pinnacle”) proposed $2.262 billion 7-year senior secured term loan (“Term Loan B”) and $200 million 5-year senior secured revolving credit facility (“Revolver”).

“Net proceeds, together with of $220 million of cash on hand, will be used to refinance the company’s existing revolving credit facility and three term loans. The rating outlook is stable.”

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Performance in fiscal 3Q16

Pinnacle Foods (PF) reported fiscal 3Q16 net sales of $758.8 million, a rise of 19.3% compared to net sales of $636.3 million in fiscal 3Q15. The rise in net sales was due to the acquisition of Boulder Brands as well as a rise in net price realization and volume and mix.

The company’s gross profit margin and EBIT[1. earnings before interest and tax] margin expanded by 230 basis points and 20 basis points, respectively, in fiscal 3Q16 compared to fiscal 3Q15.

Its net income and EPS (earnings per share) rose to $52.4 million and $0.44, respectively, in fiscal 3Q16 compared to $48.1 million and $0.41, respectively, in fiscal 3Q15. It reported adjusted EPS of $0.53 in fiscal 3Q16, a rise of 15.2% compared to fiscal 3Q15.

Pinnacle Foods’s cash and cash equivalents fell 8.6% and its inventories rose 24.6% between fiscal 3Q16 and fiscal 4Q15.

Projections

Pinnacle Foods made the following projections for fiscal 2016:

  • adjusted EPS of $2.13–$2.15, which includes $0.08–$0.09 from the Boulder Brands acquisition
  • input cost inflation of 2.0%–2.5%
  • interest expense of ~$140.0 million
  • capital expenditure of $110.0 million–$120.0 million

Now we’ll look at Delphi Automotive (DLPH).

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