Last Updated: 16 Sep 2024
Executive Summary
Flowers Foods Inc. (FLO) is a leading producer and marketer of packaged bakery products in the United States. The company has a strong financial position with a market capitalization of $4.88 billion, EBITDA of $505.6 million, and a trailing P/E ratio of 37.98. Despite facing challenges in the current economic environment, Flowers Foods has demonstrated resilience with positive quarterly earnings and revenue growth.
Company Overview
Flowers Foods is headquartered in Thomasville, Georgia, and operates 43 bakeries and 103 distribution centers across the country. The company's portfolio includes iconic brands such as Nature's Own, Wonder Bread, and Dave's Killer Bread. Flowers Foods serves a diverse customer base, including retail grocery stores, foodservice operators, and convenience stores.
Fundamental Analysis
Revenue: Flowers Foods reported revenue of $5.13 billion in the trailing twelve months (TTM), representing an 8.8% increase year-over-year.
Earnings: Diluted EPS for the TTM was $0.61, reflecting a 20% growth compared to the previous year.
Profitability: The company's profit margin and operating margin are at 2.51% and 7.28%, respectively.
Return on Equity: Flowers Foods has a return on equity (ROE) of 9.04%, indicating efficient use of shareholder funds.
Dividend: The company pays an annual dividend of $0.93 per share, resulting in a dividend yield of 4.14%.
Technical Analysis
Price Action: The stock price of FLO has been trading within a range between $18.83 and $25.59 over the past 52 weeks.
Moving Averages: The 50-day moving average is at $22.6, while the 200-day moving average is at $22.92.
Support and Resistance: Key support levels are at $22.50 and $21.00, while resistance levels are at $24.00 and $25.00.
Short Term Outlook
In the short term, Flowers Foods is expected to continue facing inflationary pressures and supply chain disruptions. However, the company's strong brand portfolio and cost-saving initiatives are likely to provide support. The stock price is currently trading near its 50-day moving average, and a break above $24.00 could signal further upside potential.
Long Term Outlook
The long-term outlook for Flowers Foods is positive. The company is well-positioned to benefit from the growing demand for packaged bakery products, particularly in the health and wellness segment. Flowers Foods' commitment to innovation and sustainability is also expected to drive long-term growth.
Analyst Recommendations
Analysts have a mixed outlook on Flowers Foods. Six analysts rate the stock as "Hold," one as "Buy," and one as "Sell." The average analyst target price is $24.25, implying a potential upside of 5.1%.
Conclusion
Flowers Foods Inc. is a solid investment opportunity with a strong financial position and a positive long-term outlook. While the company faces near-term challenges, its brand strength and growth initiatives are expected to support its future performance. Investors should consider the stock as a potential addition to their portfolio for both short-term and long-term gains.
