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On Monday, Stifel analysts began coverage of Maple Leaf Foods Inc . (TSX:MFI) (OTC:MLFNF) with a Buy rating. The analysts set a price target of Cdn$36.50, citing the company’s ongoing earnings recovery and strategic initiatives.
Maple Leaf Foods, a Canadian consumer-packaged meats company, is undergoing a significant earnings recovery, according to Stifel. The company’s earnings bottomed in the first quarter of 2023, and its financial leverage peaked at six times the trailing twelve months’ EBITDA. The company is benefiting from improved market conditions in its pork operations and a consolidation of its manufacturing footprint following substantial capital expenditures.
Stifel highlighted management’s efforts to simplify the company’s structure, including the upcoming divestiture of its pork processing operations. The analysts noted that the company’s valuation and earnings growth momentum present a compelling opportunity for investors.
The price target of Cdn$36.50 is based on a sum-of-the-parts valuation. This includes a 10x multiple on the 2026 EBITDA for Maple Leaf Foods’ Consumer Packaged Goods segment and a 5.5x multiple on its Canada Packers EBITDA estimates.
Maple Leaf Foods’ established brands and strategic initiatives are resonating with Canadian consumers, positioning the company for future growth, according to Stifel’s analysis.
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