How Has Flowers Foods Stock Fared in 2018?



Stock price movement impressive

As of May 4, 2018, Flowers Foods (FLO) stock price was trading at $22.34, a rise of 15.7% YTD (year-to-date). The company is scheduled to report its 1Q18 results on May 17. Its stock price movement could see a boost as analysts’ projections remain upbeat.

Flowers Foods’ 1Q18 sales are expected to rise 1.3%, while its adjusted EPS (earnings per share) are expected to rise 24%. The company is likely to see improvements in its financial performance driven by cost-cutting efforts and organizational restructuring. Product-wise, Dave’s Killer Bread continues to witness strong demand and is expected to drive FLO’s top line growth. Since its 4Q17 results on February 7, FLO has risen 17.9%.

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From a stock price gains perspective, Flowers Foods’ peers the Campbell Soup Company (CPB), TreeHouse (THS), and J&J Snack Foods (JJSF) have fallen 14.7%, 10.7%, and 12.6%, respectively, on a YTD basis as of May 4. In comparison, the S&P 500 Index has fallen 0.4% on a YTD basis. The benchmark index’s performance remains muted owing to the lingering US-China trade war and the upcoming November midterm elections.

A look at the company’s PE

As of May 4, Flowers Foods was trading at a 12-month forward PE (price-to-earnings multiple) of 19.7x. Forward PE reflects the investment one needs to make in a company to earn a return of one dollar of that company’s forward EPS.

Flowers Foods is trading at a higher valuation multiple than some of its peers. Campbell Soup is trading at a 12-month forward PE of 12.6x, while TreeHouse is trading at a 12-month forward PE of 16.0x. However, J&J Snack Foods is trading at a 12-month forward PE of ~25.6x as of May 4, higher than that of Flowers Foods.


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