Food Manufacturing Stock With a Bright Upside

FoodTreeHouse Foods Inc. (NYSE: THS) is an American food producer that engages primarily with the retail market.  It produces a range of products from powdered creamers to salad dressings and cereals. As an essential company in the food supply chain, it has remained operational during the COVID-19 Pandemic.

Revenue at TreeHouse has declined in the last two years due to rising production costs and shifting consumer trends. The company has responded by optimizing its business, and this has helped to protect the bottom line. The gross profit margin at the end of 2019 was 16.94%, and the EBITDA margin was 10.58%. The company is on track to grow its earnings in the current fiscal year.

Management recently raised its earnings forecast for FY20 to $2.75 per share, which would be a moderate boost over the $2.39 per share that the company reported last year. Revenue is gradually increasing, and even with heightened costs during the health crisis, this year should be an improvement over the previous two.

The stock is relatively affordable so a moderate investment can be made while still limiting risk. The stock has missed out on the recent market rally but analysts believe it’s now at a tipping point. The average target of $56.36 suggests a strong upside for investors who buy now.

Key Data:

  • 1 Year Price Growth: -13.19%
  • YTD Price Growth: -11.13%
  • 3 Month Price Growth: -17.54%

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