Following these results, the analysts raised their FY16 EPS estimate to $2.15 from $2.11 and FY17 EPS estimate to $2.37 from $2.33.
The updated $2.15 EPS estimate is based on the following:
- PF organic sales (Birdseye +4.3 percent, DH -1.9 percent)
- Boulder sales of $480 million
- Gross margin 29.7 percent (+145bp year-over-year)
- Operating margin 17.1 percent (+45bp year-over-year)
- Tax rate 36.8 percent
The analysts believe 2017 brings greater earnings levers as key capacity additions (Vancouver + Maryland) can accelerate Gardein/Birdseye distribution and Boulder supply chain synergies boost gross margin.
UBS maintains its Neutral rating on Pinnacle Foods, raising price target to $50 from $48.
At time of writing, Pinnacle Foods was up 2.91 percent on the day, seen trading at $50.24.
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