UPDATE: Goldman Sachs Initiates Coverage on Pinnacle Foods with Neutral Rating, $25 PT on Compelling Cash Flow, Fair Value

In a report published Tuesday, Goldman Sachs analyst Jason English initiated coverage on Pinnacle Foods

with a Neutral rating and $25.00 price target. In the report, English noted, “We initiate coverage of PF with a Neutral rating. Cash flow dynamics for the company are healthy, especially in light of its NOL tax shelter. Its 3% dividend yield is also attractive and we appreciate the earnings visibility afforded by the current input cost environment (PF's P&L has above-average sensitivity to COGS volatility). But these strengths are balanced by a relatively disadvantaged portfolio and valuation that appears fair following the successful IPO and subsequent rally. We can see a path to further outperformance, but that is largely predicated on accretive M&A, the timing and potential benefit of which can not be predicted.” Pinnacle Foods closed on Monday at $23.93.