Taglich Brothers Maintains Buy Rating On Lifeway Foods

According to Taglich Brothers, Lifeway Foods (NASDAQ: LWAY) Buy rating is maintained.

Taglich Brothers said that it is maintaining its Speculative Buy rating on shares of Lifeway Foods, Inc. (NasdaqGM: LWAY) and 12-month price target of $12.15 per share. “Our price target is based on a historic trailing price-to-sales multiple of 2.6X, applied to our 2012 sales estimate of $4.99 per share, discounted to a year-ahead value. For 2011, we project earnings of $0.35 per share on gross sales of $79 million. Previously we projected EPS of $0.22 on sales of $79 million. 1Q11 results eased gross margin concerns, as a 10% reduction in milk costs went into effect on January 1, 2011. The increase in our profit forecast is partly offset by higher selling costs to build brand awareness. For 2012, we project EPS of $0.38 on gross sales of $83.1 million vs. our prior $0.28 EPS estimate on gross sales of nearly $84 million. Earnings should increase due to the potential for stable milk prices, enabling gross margin to remain above 35%. New products introduced late in 2011 could lend upside to our forecasts.”

Lifeway Foods closed yesterday at $10.13.