Robinhood shares gain on Q2 beat, as user and crypto growth accelerate
On Friday, Stifel analysts adjusted their outlook on TreeHouse Foods (NYSE:THS) shares, reducing the price target from $35.00 to $26.00 while still maintaining a Hold rating on the stock. According to InvestingPro data, the stock appears undervalued at its current market capitalization of $1.1 billion, with the stock trading near its 52-week low of $21.46. The revision follows TreeHouse Foods' preannouncement of a stronger-than-expected first quarter performance, with revenue of at least $792 million and EBITDA of at least $52 million. This indicates a revenue consistency and a 13% growth in EBITDA, which is about 24% higher than the mid-point of the company’s first-quarter guidance range.
The company's EBITDA for the first quarter surpassed Stifel's previous estimate by approximately $7 million, supported by a stronger margin performance. TreeHouse Foods also confirmed its guidance for the year 2025, which includes anticipated cost savings from an operational enhancements plan that was unveiled on Friday. Despite recent challenges reflected in a -46.96% six-month price return, InvestingPro's comprehensive analysis indicates the company maintains a 'Fair' overall financial health score.
Additionally, TreeHouse Foods provided an update on tariffs, indicating that only 5% of sales are conducted outside the U.S., and nearly all finished goods are compliant with the United States-Mexico-Canada Agreement (USMCA), suggesting that the company would likely experience minimal direct impact from tariffs. With annual revenue of $3.35 billion and a current ratio of 1.36, the company maintains strong liquidity to manage its operations effectively.
The operational enhancements plan, which is part of the company's long-term strategy, aims to streamline operations and improve efficiencies, potentially leading to better financial performance in the future. Despite the lowered price target, Stifel's continued Hold rating reflects a cautious but not negative stance on TreeHouse Foods' stock at this time.
In other recent news, TreeHouse Foods has provided preliminary earnings estimates for the first quarter of 2025, projecting adjusted net sales of at least $792 million and adjusted EBITDA of at least $52 million. The company has reaffirmed its financial guidance for 2025, with expected annual net sales between $3.34 billion and $3.40 billion and adjusted EBITDA ranging from $345 million to $375 million. TreeHouse Foods recently completed the acquisition of Harris Tea, which is expected to enhance its market presence in the private label tea category. The company is also undertaking organizational changes aimed at increasing operational efficiency, including centralizing corporate support functions and eliminating approximately 150 jobs.
Despite a recent earnings miss, TreeHouse Foods' future guidance has been positively received by the market. The company reported a fourth-quarter EPS of $0.95, slightly below the expected $0.97, and revenue of $905.7 million, missing the forecast of $907.72 million. Analysts at Stifel have maintained a Hold rating on TreeHouse Foods with a price target of $35, noting the company's focus on margin improvement despite soft demand in the packaged food sector. TreeHouse Foods' strategic initiatives, including significant supply chain savings and margin management actions, are seen as steps towards bolstering financial performance. The company expects to achieve $250 million in supply chain savings through 2027, which is part of its long-term strategy to enhance profitability.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.