Morgan Stanley: Tupperware Brands Trips Over Low Bar

Tupperware Brands Corporation TUP shares fell sharply Wednesday after the company cut its 2014 outlook below Street views.

"The bar is low for Tupperware, but we expect the stock to be weak" in light of the outlook, Morgan Stanley's Dara Mohsenian said.

Tupperware traded down 10 percent to $64.23 per share. Year to date, the shares are off more than 31 percent.

The Orlando, Florida-based consumer products company also forecast 2015 sales growth of between 4 percent and 6 percent. That's below Tupperware's long-term growth rate of 6 to 8 percent.

As a result, Mohsenian expects the consensus estimate for Tupperware's 2015 results will probably fall by 8 percent.

"We thought 2015 consensus was too high, but this revision is greater than we expected," said Mohsenian, who maintained an Equal-Weight rating on the stock.

Third-quarter results were "sub-par but okay," according to Mohsenian, noting that adjusted earnings of $0.90 per share were just a penny below expectations, while sales of $588.7 million was in line with the consensus.

Total sales as measured in local currencies grew 4 percent from the second quarter. Tupperware sells exclusively through 2.9 million direct sales representatives who work as independent contractors.

Sales in emerging markets slowed to 8 percent from 10 percent in the second quarter, while sales fell 4 percent in developed markets, compared with a 7 percent decline in the second quarter.