On Wednesday, B&G Foods (NYSE:BGS) shares received a continuation of Neutral rating and an $8.00 price target from Piper Sandler, following a report of third-quarter results that fell short of expectations. The company's earnings per share (EPS), revenue, and adjusted EBITDA all missed forecasts, prompting a downward revision of its full-year 2024 guidance.
According to the investment firm, B&G Foods' volume declines are a concern as they may lead to adjustments in retailer inventories and possibly affect shelf space allocations. The analyst noted that the drop in soybean oil prices, which fell 12.4% during the third quarter of 2024, should have a neutral impact on profits but poses a challenge for revenue.
The potential sale of B&G Foods' Frozen & Vegetable business is expected to progress slowly. In light of the recent performance and market conditions, Piper Sandler has adjusted its future earnings projections for the company. The estimated EPS for the year 2025 has been reduced from $0.80 to $0.70, and for 2026 from $0.84 to $0.75.
Despite these adjustments, the firm has decided to maintain the price target of $8.00, now based on the company's projected 2026 earnings, which is approximately 10 times the estimated EPS.
In other recent news, B&G Foods, Inc. experienced a noteworthy decline in Q3 earnings and revenue, falling short of analyst expectations. The company reported an adjusted earnings per share of $0.13, which was notably below the expected $0.20. Moreover, revenue was reported at $461.1 million, missing the consensus forecast of $473.8 million.
One of the reasons for this decline was the divestiture of its Green Giant U.S. shelf-stable product line and lower unit volumes, which led to an 8.3% YoY drop in Q3 revenue. The company's adjusted EBITDA also fell by 12.5% YoY to $70.4 million in Q3.
In light of these developments, B&G Foods has revised its guidance downward for the full year 2024, now expecting net sales of $1.92-$1.95 billion and adjusted EPS of $0.67-$0.77. These recent developments provide essential insight into the company's financial performance.
InvestingPro Insights
Recent data from InvestingPro sheds additional light on B&G Foods' financial situation. The company's market capitalization stands at $698.23 million, reflecting its current market valuation. Despite the challenges highlighted in the article, B&G Foods maintains a significant dividend yield of 8.62%, which could be attractive to income-focused investors.
InvestingPro Tips suggest that while B&G Foods was not profitable over the last twelve months, analysts predict the company will return to profitability this year. This aligns with the article's mention of adjusted future earnings projections. Moreover, the company has maintained dividend payments for 18 consecutive years, demonstrating a commitment to shareholder returns despite recent headwinds.
The price-to-book ratio of 0.92 indicates that the stock may be undervalued relative to its book value, potentially offering a margin of safety for investors. This could be particularly relevant given the company's current challenges and the market's reaction to its recent earnings miss.
For readers interested in a deeper analysis, InvestingPro offers 5 additional tips that could provide further insights into B&G Foods' financial health and prospects.
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