What Happened?
Shares of packaged foods company B&G Foods (NYSE: BGS) fell 1% in the afternoon session after a pessimistic analyst outlook highlighted downward revisions to profit forecasts and expectations for continued sales declines.
The consensus rating from 16 analysts was a 'Hold' on the stock. Analysts pointed to lowered profit forecasts for both 2024 and 2025. This view was based on expectations of ongoing declines in organic sales and soft trends in the foodservice industry, such as reduced foot traffic in restaurants. The overall sentiment from analysts was cautious, with a majority suggesting to either hold or sell the shares, reflecting concerns about the company's near-term performance.
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What Is The Market Telling Us
B&G Foods’s shares are quite volatile and have had 17 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 26 days ago when the stock gained 4% on the news that the company outlined its strategic transformation plan at the Barclays Global Consumer Staples Conference.
During the presentation, CEO Casey Keller detailed efforts to simplify the company's portfolio by focusing on core categories like spices, seasonings, and meals.
A key part of this strategy includes a plan to divest the Green Giant business by 2025, a move aimed at reducing complexity and improving margins. B&G Foods is also working to reduce its net leverage from approximately 7x to 6x within the next year and is targeting a long-term EBITDA margin of 18% to 20%. The company noted an improving sales trend, with early Q3 results showing a smaller decline compared to previous quarters, and announced a new $10 million cost-saving initiative.
B&G Foods is down 37.2% since the beginning of the year, and at $4.48 per share, it is trading 49.8% below its 52-week high of $8.91 from September 2024. Investors who bought $1,000 worth of B&G Foods’s shares 5 years ago would now be looking at an investment worth $161.18.
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