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UBS begins coverage on TreeHouse Foods (NYSE:MSc) with a Buy rating and a target price of $60. The company believes that the food processing company is in the early stages of the ramp-up cycle and is ready benefit from a number of strategic initiatives and secular headwinds.
Analyst Cody Ross points to investments made to improve service levels and the sale of a significant portion of the meal prep business to reduce complexity. Tree house (MSc) is considered to have the advantage of scale to be a low-cost leader and benefit from increased market share in the number of private labels.
“Looking ahead, we expect the increased capacity to free up THS when supply chain disruptions are moderate, which will allow the company to capitalize on growing demand for PL products. Meanwhile, we believe interest expense has been mis-modeled by Street after the Meal Prepare to Sell.”
UBS sets EBITDA estimates for 2023 and 2024 for TreeHouse Foods (MSc) above consensus point.
Shares of TreeHouse Foods (MSc) reassemble 6.62% Monday morning after the rally from UBS. Stocks that trade on it 50-day, 100-day and 200-day moving averages.
