RBC Capital Raises Price Target on B&G Foods (BGS) Following Announced Acquisition
Get Alerts BGS Hot Sheet
Rating Summary:
4 Buy, 11 Hold, 4 Sell
Rating Trend: Up
Today's Overall Ratings:
Up: 11 | Down: 26 | New: 12
Join SI Premium – FREE
RBC Capital reiterated an Outperform rating on B&G Foods (NYSE: BGS), and raised the price target to $57.00 (from $52.00), following the company's announced acquisition of the spices business of ACH Food Companies. The acquisition price equates to approximately 9.4x EBITDA before synergies and excluding the cash tax benefit from asset purchase accounting. RBC anticipates roughly $200M of the $365M deal price will be paid with cash on hand.
Analyst David Palmer commented, "Following the announced acquisition of ACH’s spices business we are increasing our 2016e and 2017e EPS from $2.24 and $2.45 to $2.27 (+48% YOY; $2.19 cons.) and $2.71 (+19% YOY; $2.31 cons.). The higher estimates reflect roughly $30M in incremental EBIT from the deal, $4M in incremental interest cost and a 37% tax rate (consistent with the current corporate rate). As consistent with other B&G acquisitions, the asset purchase structure will lead to higher free cash flow accretion—we estimate $0.43-0.45/share. Our new price target of $57 is based on our DCF analysis (see page 2) and equates to 20x 2018e EPS."
For an analyst ratings summary and ratings history on B&G Foods click here. For more ratings news on B&G Foods click here.
Shares of B&G Foods closed at $50.47 yesterday.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Aston Martin Lagonda Global Holdings Plc. (AML:LN) (ARGGY) PT Lowered to GBP1.79 at Citi
- Constellation Brands (STZ) PT Raised to $262 at Deutsche Bank, 'We suspect wine & spirits will lag longer-term aspirations'
- Lake Street Capital Markets Downgrades ModivCare (MODV) to Hold, 'prudent to allow the mechanics time to do their job'
Create E-mail Alert Related Categories
Analyst Comments, Analyst EPS Change, Analyst PT Change, Mergers and AcquisitionsRelated Entities
RBC Capital, Definitive AgreementSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!