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Food Processing Stocks With Most Upside (ADM, BG, TSN, SFD, CPO, CAG, KFT, SLE, GIS, K)

Paul Ausick — Thu, 03 Nov 2011 19:01:24 +0000

The companies we’re looking at today run the gamut from large farm and food products producers to the packaged goods makers that make the products on store shelves. It’s a wide range, for sure, but all are exposed to both commodity prices on one end and on consumer purchasing on the other.

Large farm products companies like Archer Daniels Midland Co. (NYSE: ADM) and Bunge Ltd. (NYSE: BG) have watch corn and wheat prices decline by about -20% and -29% since peaks earlier this year. Fertilizer prices have risen and so have fuel prices. All have an impact on revenues and earnings.

Processing companies like Tyson Foods Inc. (NYSE: TSN), Smithfield Foods, Inc. (NYSE: SFD), Corn Products International Inc. (NYSE: CPO), and ConAgra Foods, Inc. (NYSE: CAG) package private label foods, provide commercial food, and even offer some branded products. The diversity of their customers gives them a bit of a barrier against a collapse in one or another of their markets.

Packaged food giants like Kraft Inc. (NYSE: KFT), Sara Lee Corp. (NYSE: SLE), General Mills, Inc. (NYSE: GIS), and Kellogg Company (NYSE: K) are all household names and depend on strong brands to carry them through slow economic times.

Data from Yahoo! Finance, and current share prices gathered about noon today.

Archer Daniels Midland Co. (NYSE: ADM) has a median target price of $35.00 from 13 brokers. Shares are trading today at $28.88, for an implied gain of $6.12, or 21%. ADM’s forward P/E is 8.52 and the company pays a dividend yield of 2.3%. The stock’s 52-week trading range is $23.69-$38.02, and at today’s price that’s about 22% above its 52-week low and 24% below the 52-week high. This year’s wheat harvest looks to be on a near-record pace, and wheat prices are expected to fall to below $6/bushel by the end of the year from a current price of around $6.36.

Rising corn prices hit ADM hard in its most recent quarter, lowering profit in its biofuel (ethanol) division by -23% and in its sweetener and starches division by -81%. Corn prices are currently expected to remain about the same into next year, which won’t help ADM’s processing revenue. Fortunately for the company its trading profits will get a boost from the higher corn prices.

Bunge Ltd. (NYSE: BG) has a median target price of $74.00 from 11 brokers. Shares are trading today at $61.38, for an implied gain of $12.62, or 21%. Bunge’s forward P/E is 9.32 and the company pays a dividend yield of 1.6%. The stock’s 52-week trading range is $54.03-$76.13, and at today’s price that’s about 14% above its 52-week low and 19% below the 52-week high.

Bunge missed EPS estimates badly in its third quarter as the company ran afoul of volatility in the grain markets. The company painted a brighter picture for its fourth quarter, basing its view on the tightness of supply and the rising demand for food.

Tyson Foods Inc. (NYSE: TSN) has a median target price of $23.00 from 15 brokers. Shares are trading today at $19.27, for an implied gain of $3.73, or 19%. Tyson’s forward P/E is 9.53 and the company pays a dividend yield of 0.8%. The stock’s 52-week trading range is $14.79-$20.12, and at today’s price that’s about 30% above its 52-week low and 4% below the 52-week high.

Tyson will report earnings for its fourth fiscal quarter on November 21st. The consensus EPS estimate is $0.32, half as much as the same period a year ago. Rising feed costs have hammered revenues and earnings this year, and Tyson and other chicken producers are trying to get its customers to share commodity price risk by taking shorter term contracts tied to the cost of feed grains.

Filed under: Agriculture, Analyst Calls, Consumer Goods, Food Tagged: ADM, BG, CAG, CPO, GIS, K, KFT, SFD, SLE, TSN

Top Analyst Upgrades & Downgrades (AWK, BAC, BIP, CAT, C, CPO, DE, DMND, ECA, GPS, GOV, JOYG, JPM, OPEN, SSW, TXRH, USM, VLO)

Administrator — Wed, 02 Nov 2011 12:24:59 +0000

These are some of Wednesday’s top analyst upgrades, downgrades, and initiations seen from Wall Street research calls.

American Water Works Company, Inc. (NYSE: AWK) added to Strong Buy List at Zacks.
Bank of America Corporation (NYSE: BAC) Cut to Hold at S&P Capital IQ (late-Tuesday).
Brookfield Infrastructure Partners LP (NYSE: BIP) reinstated as Outperform with $32 target at Credit Suisse.
Caterpillar Inc. (NYSE: CAT) Started as Overweight at Morgan Stanley.
Citigroup, Inc. (NYSE: C) Cut to Hold at S&P Capital IQ (late-Tuesday).
Corn Products International (NYSE: CPO) named Value Stock of the Day at Zacks.
Deere & Co. (NYSE: DE) Started as Underweight at Morgan Stanley.
Diamond Foods, Inc. (NASDAQ: DMND) Cut to Neutral at BofA/ML; Cut to Neutral at Janney.
Encana Corporation (NYSE: ECA) Cut to Neutral at BofA/ML.
Gap Inc. (NYSE: GPS) Raised to positive at Susquehanna.
Government Properties Income Trust (NYSE: GOV) Cut to Neutral at Janney.
Joy Global, Inc. (NASDAQ: JOYG) Started as Equalweight at Morgan Stanley.
J.P. Morgan Chase & Co. (NYSE: JPM) Cut to Hold at S&P Capital IQ (late-Tuesday).
OpenTable, Inc. (NASDAQ: OPEN) Cut to Neutral at BofA/ML; Cut to Market Perform at Morgan Keegan; Raised to Buy at ThinkEquity.
Seaspan Corporation (NYSE: SSW) Cut to Hold at Deutsche Bank.
Texas Roadhouse Inc. (NASDAQ: TXRH) Cut to Neutral at Credit Suisse.
United States Cellular Corporation (NYSE: USM) Cut to Underweight at Morgan Stanley.
Valero Energy Corporation (NYSE: VLO) Reiterated Buy with $35 target at Argus.

We were also given a new updated list of the prized Gabelli Focus Five List showing that all five positions were new positions as special situation stocks that the firm feels are undervalued to the market expectations. This list outperformed in the last quarter and has significantly outperformed the S&P going back to the 2006 inception.

JON C. OGG

Filed under: Analyst Calls Tagged: AWK, BAC, BIP, C, CAT, CPO, DE, DMND, ECA, GOV, GPS, JOYG, JPM, OPEN, SSW, TXRH, USM, VLO

Top Analyst Upgrades & Downgrades (ANF, ALU, APO, BHI, BP, CPO, ETFC, FUJIY, GMCR, LECO, NVDA, OXY, PEP, QIHU, SNDK, LUV, AMTD, TE)

Administrator — Mon, 09 May 2011 12:19:56 +0000

These are some of the top analyst upgrades, downgrades, and initiations seen from Wall Street research calls this Monday morning.

Abercrombie & Fitch Co. (NYSE: ANF) Cut to Neutral at Susquehanna.
Alcatel-Lucent (NYSE: ALU) Cut to Sell at Soc-Gen.
Apollo Global Management, LLC (NYSE: APO) Started as Outperform at Credit Suisse; Started as Overweight at JPMorgan; Started as Buy at Goldman Sachs; Started as Buy at BofA/ML; Started as Buy at UBS.
Baker Hughes Inc. (NYSE: BHI) Raised to Overweight at Barclays.
BP plc (NYSE: BP) Raised to Equal-Weight at Barclays.
Corn Products International Inc. (NYSE: CPO) Noted as Value and Strong Buy at Zacks.
E*TRADE Financial Corporation (NASDAQ: ETFC) Raised to Buy at Goldman Sachs.
Fujifilm Holdings (FUJIY) Cut to Underperform as Bear of the Day at Zacks.
Green Mountain Coffee Roasters, Inc. (NASDAQ: GMCR) Maintained Strong Buy on Momentum at Zacks.
Lincoln Electric Holdings Inc. (NASDAQ: LECO) named as Bull of the Day at Zacks.
NVIDIA Corporation (NASDAQ: NVDA) Maintained Neutral at Gleacher & Co.
Occidental Petroleum Corporation (NYSE: OXY) Cut to Equal-weight at Barclays; Reiterated Buy at Argus.
Pepsico Inc. (NYSE: PEP) Raised to Conviction Buy List at Goldman Sachs.
Qihoo 360 Technology Co. Ltd. A (NYSE: QIHU) Started as Hold at Stifel Nicolaus.
SanDisk Corporation (NASDAQ: SNDK) Raised to Buy at ThinkEquity.
Southwest Airlines Company (NYSE: LUV) Raised to Buy at Dahlman Rose.
TD AMERITRADE Holding Corporation (NASDAQ: AMTD) Cut to Neutral at Goldman Sachs.
TECO Energy, Inc. (NYSE: TE) Cut to Underperform at BofA/ML.

You can join our free daily email distribution list to hear more about analyst upgrades and downgrades, top day trader and active trader alerts, dividend trends, news on Buffett and other investment gurus, IPOs, secondary offerings, private equity, and more.

JON C. OGG

Filed under: Analyst Calls Tagged: ALU, AMTD, ANF, APO, BHI, BP, CPO, ETFC, FUJIY, GMCR, LECO, LUV, NVDA, OXY, PEP, QIHU, SNDK, TE

Top Analyst Upgrades & Downgrades (APD, MO, ARMH, ATHN, BRCD, CPO, GE, HON, IR, MGM, MS, NFLX, OXY, PAAS, CODE, VICL, WYNN, YUM)

Administrator — Tue, 26 Apr 2011 12:09:57 +0000

These are some of the top analyst upgrades, downgrades, and initiations seen from Wall Street research calls this Tuesday morning.

Air Products & Chemicals Inc. (NYSE: APD) Reiterated Buy and $108 target at Argus.
Altria Group Inc. (NYSE: MO) Cut to Hold at Argus.
ARM Holdings plc (NASDAQ: ARMH) Raised target and estimates at Citigroup.
Athenahealth, Inc. (NASDAQ: ATHN) Started as Underperform at Oppenheimer.
Brocade Communications Systems, Inc. (NASDAQ: BRCD) Raised to Outperform at Baird.
Corn Products International Inc. (NYSE: CPO) Cut to Hold at S&P Equity Research (late-Monday call).
General Electric Co. (NYSE: GE) Reiterated Buy with $26 target at Argus.
Honeywell International Inc. (NYSE: HON) Reiterated Buy and Raised target to $70 at Argus.
Ingersoll-Rand Plc (NYSE: IR) Raised to Buy at BofA/ML.
MGM Resorts International (NYSE: MGM) Cut to Underperform with $11 target at Credit Suisse.
Morgan Stanley (NYSE: MS) maintained Underperform as Bear of the Day at Zacks.
Netflix, Inc. (NASDAQ: NFLX) Cut to Sell with $170 target at Janney; reiterated Outperform at Credit Suisse.
Occidental Petroleum Corporation (NYSE: OXY) Raised to Buy at Deutsche Bank.
Pan American Silver Corp. (NASDAQ: PAAS) Raised to Buy at Jefferies.
Spansion Inc. (NASDAQ: CODE) Reiterated Buy and $28 target at Gleacher & Co.
Vical Inc. (NASDAQ: VICL) Started as Buy at Canaccord.
Wynn Resorts, Ltd. (NASDAQ: WYNN) maintained Outperform as Bull of the Day at Zacks.
YUM! Brands Inc. (NYSE: YUM) Reiterated Outperform and raised target to $61 at Credit Suisse.

JON C. OGG

Filed under: Analyst Calls Tagged: APD, ARMH, ATHN, BRCD, CODE, CPO, GE, HON, IR, MGM, MO, MS, NFLX, OXY, PAAS, VICL, WYNN, YUM

Top 10 Analyst Upgrades and Downgrades (ADM, ALXN, CBS, CPO, IBM, KAR, LXK, EDU, TSCO, XRX)

247wallst — Wed, 20 Jan 2010 13:24:33 +0000

These are this Wednesday’s top 10 analyst upgrades, downgrades, and initiations seen in Wall Street research calls:

Archer-Daniels Midland (NYSE: ADM) Raised to Buy at Citigroup.
Alexion Pharmaceuticals (NASDAQ: ALXN) Started as Perform at Oppenheimer.
CBS Corp. (NYSE: CBS) Raised to Buy at Jefferies.
Corn Products (NYSE: CPO) Cut to Hold at Citigroup.
IBM (NYSE: IBM) Raised to Buy at Canaccord.
KAR Auction Services (NYSE: KAR) started as Outperform at Credit Suisses and RBC Capital.
Lexmark International (NYSE: LXK) Started as Market Perform at JMP Securities.
New Oriental Education & Technology Group (NYSE: EDU) Cut to Neutral at Credit Suisse.
Tractor Supply Co. (NASDAQ: TSCO) Cut to Neutral at Goldman Sachs.
Xerox Corp. (NYSE: XRX) Started as Market Perform at JMP Securities.

You are invited to join our free daily email distribution list to hear about top analyst upgrades and downgrades, IPOs and secondary offerings, ongoing day trader and options trader alerts, stock and market rumors, Buffett and guru investor news, M&A and more.

JON C. OGG

Posted in Analyst Calls Tagged: ADM, ALXN, CBS, CPO, EDU, IBM, KAR, LXK, TSCO, XRX

Top Pre-Market Analyst Downgrades (ABB, BCS, CPO, CYNO, FFIV, GG, HMA, HBC, MBT, NWS, TRI, VIA, VIP)

247wallst — Fri, 16 Jan 2009 07:53:16 +0000

These are some of the top pre-market analyst downgrades we have seen early this Friday morning:

ABB (ABB) Cut to Neutral at Goldman Sachs.
Barclays (BCS) Cut to Sell at RBS.
Corn Products (CPO) Cut to Sell at Deutsche Bank.
Cynosure (CYNO) Cut to Hold at Citigroup.
F5 Networks (FFIV) Cut to Neutral at UBS.
Goldcorp (GG) Cut to Neutral at JPMorgan.
Health Management (HMA) Cut to underweight at Barclays.
HSBC (HBC) Cut to Sell at RBS.
Mobile TeleSystems (MBT) Cut to Equal Weight at Morgan Stanley.
News Corp. (NWS) Cut to Neutral at UBS.
Thomson Reuters (TRI) Cut to Neutral at JPMorgan.
Viacom (VIA) Cut to Neutral at UBS.
Vimpelcom (VIP) Cut to Equal Weight at Morgan Stanley.

Jon C. Ogg
January 16, 2009

Posted in Analyst Calls Tagged: ABB, BCS, CPO, CYNO, FFIV, GG, HBC, HMA, MBT, NWS, TRI, VIA, VIP

Bunge (BG) Bets The Farm, Doubles Down On Corn

247wallst — Mon, 23 Jun 2008 05:22:26 +0000

Bunge (BG), which has a big business in finished corn products, is buying Corn Products International (CPO) for $4.4 billion. CPO’s name pretty much says how it makes its money.

The price is a 25% premium to the Corn Product’s recent share price, which is an awful risk for Bunge. According to The Wall Street Journal, "Buying Corn Products will give Bunge a presence in nearly every step of the so-called corn value chain."

The fact that the price of corn and other agricultural commodities is rising could be viewed as good for Bunge. It could also be viewed as very, very bad.

Bunge and its peers are operating in a market where corn price have spiked up 20% in recent weeks due to flooding in the Midwest. The rise in the commodity may allow Bunge to increase revenue, but it may quickly lose the opportunity to pass along the costs of raw goods to its customers. As the price of corn flakes and bread moves up, consumers may simply buy less. Bunge and Corn Products customers like Kellogg (K) and Coca-Cola (KO) may not be able to increase sales as expensive corn bread drives people to find food alternatives which as not as expensive.

Wall St. has started to catch on to the substantial gross margin risks at Bunge. Its shares are only up about 5% so far this year. Bunge is getting caught in the food inflation cycle and its earnings could be damaged as the second half of the year comes around. The CPO deal may end up as an example of how a fool and his money are soon parted.

Douglas A. McIntyre

Pre-Market Analyst Calls (June 5, 2007)

247wallst — Tue, 05 Jun 2007 06:37:56 +0000

AAP raised to Neutral at JPMorgan.
ALDN cut to Mkt Perform at FBR.
ALY started as Outperform at Wachovia.
BEBE cut to Mkt Perform at FBR.
BEN cut to Underweight at JPMorgan.
BHP raised to Buy at Citigroup.
CPO started as Buy at BB&T.
CRZO started as Buy at Sun Trust Robinson Humphrey.
FIF raised to Outperform at Piper Jaffray.
HAS cut to Underweight at JPMorgan.
JNPR cut to Neutral at UBS.
OCNF started as Buy at Cantor Fitzgerald.
OHI started as Neutral at UBS.
OPWV cut to Underweight at JPMorgan; cut to Underperform at CIBC.
ORBC started as Mkt Perform at Piper Jaffray.
REG started as Neutral at Baird.
SFLY started as Strong Buy at JMP Securities.
SWIR raised to Outperform at CIBC.
SLR raised to Neutral at Credit Suisse.
TELK cut to Mkt Perform at Wachovia.
TRMP cut to Underperform at Bear Stearns.
WRI started as Outperform at Baird.
XEC cut to Neutral at UBS.

Jon C. Ogg
June 5, 2007