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UPDATE: Barclays Downgrades Bemis Company Following Valuation Not Supported By Growth Trajectory

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In a report published Wednesday, Barclays analyst Scott Gaffner downgraded Bemis Company (NYSE: BMS) to Underweight from Equal-weight, dropping its price target to $36.00, following valuation not supported by growth trajectory.

According to the report, Above-average valuation combined with below-average earnings growth trajectory lead analysts to downgrade BMS to UW from EW: BMS trades at a 2x premium to the packaging industry and roughly one turn higher than its historical average despite below-average prospects for EPS growth.

“EPS grew only 6% from 2010 to 2013 versus packaging peer growth of 26%, and we forecast an EPS CAGR of 8% for BMS from 2014 to 2016, versus a 13% increase for the industry,” the report noted. “Limited earnings growth is supported by our belief that BMS will post below-average organic growth combined with the prospect of limited margin gains going forward. We reduce our 2014 EPS estimate to $2.40, and PT to $36 representing 10% downside from current levels.”

BMS closed Tuesday at $38.86 with shares trading down at 2.73 percent.

Latest Ratings for BMS

May 2018JefferiesInitiates Coverage OnHold
Apr 2018CitigroupMaintainsNeutralNeutral
Apr 2018Bank of AmericaUpgradesBuy

View More Analyst Ratings for BMS
View the Latest Analyst Ratings

Posted-In: Barclays Scott GaffnerAnalyst Color Downgrades Price Target Analyst Ratings


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