Deutsche Bank Retain Hold Rating of Flowers Foods
Wednesday, September 28, 2021 4:41 PM

Analysts at Deutsche Bank maintained Hold rating on the shares of Flowers Foods, Inc. (NYSE: FLO) as they believe that while the long term appears somewhat better, unfortunately the intermediate term remains filled with challenges that could limit earnings. They set a price target of $20 for the stock.


DB analysts state that they do not find downside in the balance sheet of Flowers Foods balance sheet, which appears pretty solid. They add that since 2008 the baked goods category has been challenging including competition, input volatility and consumer angst and while not necessarily getting worse, any improvement seems largely out of Flowers' control and more a function of the macro improvement. They state that poorer short term category dynamics could lead to a better long term for the firm. They add that despite the near-term, positives exist around the thesis of category consolidation. They state that the firm with its strong balance sheet and management talent is best positioned to pick up smaller players and possibly purchase the snack cake operations of Hostess. They add that the risk involving Flowers Foods are lower input cost and category consolidation.


On a year-to-date basis, Flowers Foods has a share performance of 3.96 percent, and as compared to Standard & Poor’s 500, it has an YTD share performance of 15.05 percent.


Flowers Foods is a leading producer and marketer of bakery products in the US. It has a market capitalization of $2.54 billion with a P/E ratio of 18.34. It has more than 136 million outstanding shares.


Shares of Flowers Foods fell 0.47 percent or 9 cents to trade at $19.22.