Dean Foods Upgraded to Outperform by BMO Capital Markets (DF)
Dean Foods (NYSE:DF) was upgraded by equities researchers at BMO Capital Markets from a “market perform” rating to an “outperform” rating in a research report issued on Monday, TheFlyOnTheWall.com reports. The firm currently has a $23.00 price objective on the stock, up from their previous price objective of $22.00. BMO Capital Markets’ price target indicates a potential upside of 17.35% from the stock’s previous close.
The analysts wrote, “First, rising global milk supplies signal that Dean’s raw milk costs will peak in November. We expect class 1 milk prices to decline from $20 per cwt to $17 in 1Q14 as lower feed costs, favorable weather, healthy inventory levels, and high farm-gate milk prices lead to record-high milk production in key global dairy regions. Second, DF’s milk volumes should bottom out in the current quarter and improve sequentially as the loss of a portion of its private-label milk volumes are cushioned by new distribution wins as well as a likely improvement in overall fluid milk volumes. Third, stable milk spread and accelerating cost savings likely will raise DF’s operating profits to $0.14-$0.16 per gallon levels. Although margins likely will remain at historical levels, new management’s strategic shift from “market share leadership” to ‘cost leadership’ should lead to a consistent, and measurable, improvement in profitability. Fourth, the successful, tax-efficient divestiture of non-fluid milk assets has materially lowered leverage and should lead to other value-creating actions, attracting a new investor base. We are adjusting our 3Q13 and 4Q13 EPS estimates to $0.13 and $0.27, while raising our 2014 and 2015 EPS estimates to $1.33 and $1.56, driven by improving operations and lower interest expense.”
Dean Foods (NYSE:DF) traded up 1.71% on Monday, hitting $19.60. The stock had a trading volume of 1,406,507 shares. Dean Foods has a 52-week low of $12.75 and a 52-week high of $22.96. The stock’s 50-day moving average is $20.17 and its 200-day moving average is $18.68. The company has a market cap of $1.841 billion and a P/E ratio of 3.58.
Dean Foods (NYSE:DF) last announced its earnings results on Thursday, August 8th. The company reported $0.13 earnings per share for the quarter, missing the analysts’ consensus estimate of $0.14 by $0.01. The company had revenue of $2.23 billion for the quarter, compared to the consensus estimate of $2.25 billion. During the same quarter last year, the company posted $0.36 earnings per share. Dean Foods’s revenue was down .3% compared to the same quarter last year. Analysts expect that Dean Foods will post $0.98 EPS for the current fiscal year.
A number of other analysts have also recently weighed in on DF. Analysts at Sanford C. Bernstein cut their price target on shares of Dean Foods from $24.00 to $20.00 in a research note to investors on Wednesday, October 16th. Separately, analysts at Deutsche Bank reiterated a “buy” rating on shares of Dean Foods in a research note to investors on Wednesday, October 2nd. They now have a $25.00 price target on the stock, down previously from $26.00. Finally, analysts at Goldman Sachs Group Inc. downgraded shares of Dean Foods from a “buy” rating to a “neutral” rating in a research note to investors on Tuesday, September 3rd. They now have a $21.00 price target on the stock. One analyst has rated the stock with a sell rating, five have assigned a hold rating and ten have given a buy rating to the company. The stock presently has an average rating of “Buy” and an average target price of $18.45.
Dean Foods Company is a food and beverage company. The Company operates through two segments: Fresh Dairy Direct and The WhiteWave Foods Company (NYSE:DF).
Get Analysts' Upgrades and Downgrades via Email - Stay on top of analysts' coverage with Analyst Ratings Network's FREE daily email newsletter that provides a concise list of analysts' upgrades and downgrades. Click here to register now.