Stifel has revised its price target for TreeHouse Foods (THS, Financial), decreasing it from $26 to $24. The investment firm maintains a Hold rating for the stock, indicating caution amid prevailing market conditions.
In its latest analysis of the Food sector, Stifel's analyst adjusted estimates for sales and earnings per share (EPS) across several companies within its coverage. The revisions were influenced by the current economic outlook and foreign exchange fluctuations. The report projects a 9% drop in EPS for the sector by 2025. This decline is primarily attributed to shrinking profit margins, driven by persistent inflation and increased investment spending, which are expected to outweigh a modest 1% growth in organic sales.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 7 analysts, the average target price for Treehouse Foods Inc (THS, Financial) is $27.57 with a high estimate of $37.00 and a low estimate of $24.00. The average target implies an upside of 21.46% from the current price of $22.70. More detailed estimate data can be found on the Treehouse Foods Inc (THS) Forecast page.
Based on the consensus recommendation from 8 brokerage firms, Treehouse Foods Inc's (THS, Financial) average brokerage recommendation is currently 2.8, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Treehouse Foods Inc (THS, Financial) in one year is $43.81, suggesting a upside of 93% from the current price of $22.7. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Treehouse Foods Inc (THS) Summary page.
THS Key Business Developments
Release Date: February 14, 2025
- Fourth Quarter Adjusted Net Sales: $911.4 million.
- Fourth Quarter Adjusted EBITDA: $118.3 million.
- Fourth Quarter Adjusted EBITDA Margin: 13%.
- Fiscal Year 2024 Adjusted Net Sales: $3.38 billion.
- Fiscal Year 2024 Adjusted EBITDA: $337 million.
- Volume and Mix Growth (Q4): 3.8% increase.
- Procurement Savings (2024): $60 million in gross savings.
- Shareholder Returns (2024): $150 million through share repurchase program.
- 2025 Adjusted Net Sales Guidance: $3.34 billion to $3.4 billion.
- 2025 Adjusted EBITDA Guidance: $345 million to $375 million.
- 2025 Free Cash Flow Guidance: At least $130 million.
- 2025 Capital Expenditures Guidance: Approximately $125 million.
- First Quarter 2025 Adjusted Net Sales Guidance: $785 million to $800 million.
- First Quarter 2025 Adjusted EBITDA Guidance: $38 million to $46 million.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Treehouse Foods Inc (THS, Financial) completed the acquisition of Harris Tea, enhancing its competitive positioning in the private label tea category.
- Fourth-quarter adjusted net sales of $911.4 million and adjusted EBITDA of $118.3 million were in line with expectations, demonstrating effective cost management.
- The company achieved significant cost savings through procurement initiatives, contributing to improved adjusted gross margin performance.
- Treehouse Foods Inc (THS) is focusing on optimizing costs across its supply chain to drive improved profitability and has visibility to delivering $250 million of gross supply chain savings through 2027.
- The company is strategically positioned to benefit from the long-term growth trends in private brand groceries and consumer snacking preferences.
Negative Points
- Treehouse Foods Inc (THS) experienced a voluntary recall of frozen griddle products, impacting supply chain operations and financial contributions in the first quarter.
- Private brand unit sales saw a sharp deceleration during the fourth quarter due to macroeconomic pressures affecting the broader food and beverage market.
- The company anticipates a challenging macro food environment and slowing category growth in 2025, with expected flat adjusted net sales.
- Volume and mix are expected to decline approximately 1% year-over-year in 2025, influenced by the frozen griddle product recall and other margin management actions.
- Treehouse Foods Inc (THS) is facing low to mid-single-digit inflation in commodities such as coffee and cocoa, which could impact profitability.
