On January 9, 2013, Zacks Investment Research upgraded
Hillshire Brands Company
) to a Zacks Rank #1 (Strong Buy), on the back of a strong
performance in the first quarter 2013.
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Why the Upgrade?
Hillshire Brands Company, the new name for Sara Lee Corporation's
North American business, has been witnessing rising earnings
estimates, driven by solid first quarter performance after its
spin off from Sara Lee. The long-term expected earnings growth
rate for this stock is 8.15%.
Hillshire Brands Company reported adjusted earnings of 51 cents
per share in the first quarter of 2013, comprehensively beating
the Zacks Consensus Estimate of 32 cents by 59.4%. Earnings
increased 19 cents from the prior-year quarter attributable to
strong top-line growth.
Adjusted net sales grew 2.0% from the prior-year quarter to $1.01
billion in the first quarter of 2013 on the back of volume growth
and the strong performance of the retail segment. The company
results were in line with the Zacks Consensus Estimate.
Hillshire Brands entered into an agreement to sell its Australian
bakery business - Kitchens of Sara Lee Pty Ltd. The divestment of
this subsidiary will enable Hillshire to concentrate on its North
American retail and food businesses.
The Zacks Consensus Estimate for fiscal 2013 increased 3.9% to
$1.58 per share as most of the estimates were revised higher over
the last 90 days. For fiscal 2014, the Zacks Consensus Estimate
increased by a penny to $1.69 per share over the same time frame
Other Stocks to Consider
Other companies with favorable Zacks Rank and worth considering
Smithfield Foods, Inc.
), both carrying a Zacks Rank #1 (Strong Buy), and
Hormel Foods Corporation
Tyson Foods Inc.
) both carrying a Zacks Rank #2 (Buy).