Jefferies Lowers Price Target for Flowers Foods Amid Retail Pressures

Published 1 hours agoFLO

Jefferies Lowers Price Target for Flowers Foods Amid Retail Pressures

Jefferies recently revised its price target for Flowers Foods (NYSE: FLO) from $20 to $16, while maintaining a 'Hold' rating. This change comes as the company faces increased retail volume pressures, particularly in the bread category during the holiday season, as highlighted by Jefferies analyst Rob Dickerson. Reuters reported that these challenges are more pronounced now compared to the third quarter.

The analyst pointed out that despite Flowers Foods ramping up promotional efforts, along with its competitors, there are concerns regarding the necessity of deep promotions to achieve sustainable volume growth. This suggests a challenging landscape for maintaining sales without sacrificing profit margins.

Despite these pressures, Flowers Foods boasts strong financial health with a current ratio of 1.24 and a solid record of increasing dividends for 11 consecutive years. Furthermore, its recent $795 million acquisition of Simple Mills is a strategic move to diversify and expand into the snacking market. The 'Hold' rating reflects a balanced view, acknowledging both the company's robust fundamentals and the hurdles posed by the competitive market environment.

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