On Mar 22, Zacks Investment Research upgraded
Flowers Foods Inc.
) to a Zacks Rank #1 (Strong Buy). Shares of this bakery products
producer have amassed an impressive return of 58.1% in the last
Why the Upgrade?
Flowers Foods has been witnessing rising earnings estimates on
the back of better-than-expected fourth-quarter 2012 results. The
bakery goods producer's earnings per share surpassed the Zacks
Consensus Estimate for the first time after reporting in line
earnings in 3 consecutive quarters. Moreover, we believe that the
company's strategy of expanding continuously through entering new
markets, building new bakeries and acquisitions have helped
induce an upward movement in the estimates.
Flowers Foods declared impressive results on Feb 7, 2013, wherein
earnings of 28 cents a share surpassed the Zacks Consensus
Estimate of 25 cents by 12.0%, and rose 64.7% from the year-ago
Net sales jumped 14.7% over the prior-year quarter to $749.4
million, and came ahead of the Zacks Consensus Estimate of $709
million. Volume increased of 10.3%, while net price/mix remained
unfavorable at 2.0%. Gross margin expanded 200 basis points to
47.9%, benefiting from higher sales volumes and improved
Further, the company has successfully expanded its reach of fresh
bakery products from about 38% of U.S. population in 2004 to more
than 70% now. Moreover, the company has a proven experience of
integrating acquisitions, having completed more than 100 since
1968 and three significant ones in just the last three years -
Tasty Baking, Lepage Bakeries, and the Sara Lee and Earthgrains
brands in California.
The Zacks Consensus Estimate for fiscal 2013 increased 1.6% to
$1.28 per share as most of the estimates were revised higher over
the last 30 days. Moreover, for fiscal 2014, the estimates were
revised higher over the same time frame, lifting the Zacks
Consensus Estimate by 5.8% to $1.46 per share.
Other Stocks to Consider
Besides Flowers Foods, other stocks in the foods industry that
are currently performing well include
J&J Snack Foods Corp.
), which has a Zacks Rank #1 (Strong Buy),
ConAgra Foods Inc.
Kraft Foods Group Inc.
), both of which hold a Zacks Rank #2 (Buy).
CONAGRA FOODS (CAG): Free Stock Analysis
FLOWERS FOODS (FLO): Free Stock Analysis
J&J SNACK FOODS (JJSF): Free Stock Analysis
KRAFT FOODS GRP (KRFT): Free Stock Analysis
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