Deutsche Bank Maintains Hold Rating On Dean Foods

According to Deutsche Bank, Dean Foods

Hold rating is maintained. Deutsche Bank said that to arrive at the $12 target it employs both a SOTP and a DCF analysis (using a 9.5% WACC derived via CAPM (0.7x beta, 4.5% risk free rate, 10% required return)). “On a LT basis we assume sales +2-3%, EBIT +4%, NI +5-6%. Upside risks include less competition (branded and private label), greater cost savings, and moderate inputs (energy, packaging, transportation, raw milk). Downside risks include greater competition, leverage, and volatile inputs.” Dean Foods closed yesterday at $11.38.