Hillshire Brands Upped to Strong Buy - Analyst Blog

By Zacks | January 10, 2013 AAA

On January 9, 2013, Zacks Investment Research upgraded Hillshire Brands Company (HSH) to a Zacks Rank #1 (Strong Buy), on the back of a strong performance in the first quarter 2013.  
 
Why the Upgrade?

Hillshire Brands Company, the new name for Sara Lee Corporation's North American business, has been witnessing rising earnings estimates, driven by solid first quarter performance after its spin off from Sara Lee. The long-term expected earnings growth rate for this stock is 8.15%.     

Hillshire Brands Company reported adjusted earnings of 51 cents per share in the first quarter of 2013, comprehensively beating the Zacks Consensus Estimate of 32 cents by 59.4%. Earnings increased 19 cents from the prior-year quarter attributable to strong top-line growth.

Adjusted net sales grew 2.0% from the prior-year quarter to $1.01 billion in the first quarter of 2013 on the back of volume growth and the strong performance of the retail segment. The company results were in line with the Zacks Consensus Estimate.

Hillshire Brands entered into an agreement to sell its Australian bakery business - Kitchens of Sara Lee Pty Ltd. The divestment of this subsidiary will enable Hillshire to concentrate on its North American retail and food businesses.

The Zacks Consensus Estimate for fiscal 2013 increased 3.9% to $1.58 per share as most of the estimates were revised higher over the last 90 days. For fiscal 2014, the Zacks Consensus Estimate increased by a penny to $1.69 per share over the same time frame

Other Stocks to Consider

Other companies with favorable Zacks Rank and worth considering include Pilgrim's Corp. (PPC) and Smithfield Foods, Inc. (SFD), both carrying a Zacks Rank  #1 (Strong Buy), and Hormel Foods Corporation (HRL) and Tyson Foods Inc. (TSN) both carrying a Zacks Rank #2  (Buy).

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