Stock price when the opinion was issued
Still likes it. Concern now is that with higher interest rates and rising unemployment, consumers are being more price-conscious. Company has acknowledged this in its biscuit category.
Reassessing pricing and packaging. EMs are about 40% of sales, she sees higher growth there. Selling assets, redeploying proceeds in higher-growth adjacent categories.
International snack giant. 200-day MA is sideways to slightly negative, stock price is now below it. Fundamentals show only mid-single-digit earnings growth, paying 20x for it. Cost pressures, margin compression. Intense competition. Foreign currency has not helped.
For a consumer staples name, look at Loblaw or COST.
Down YOY, but has actually held up well during recent market uncertainty. 40% of revenue from EMs, which tend to have stronger long-term, secular growth. Cocoa prices spiked, and chocolate is 30% of its business, so they guided earnings down. Long-term outlook still attractive, expanding into adjacent categories.
Trades at 18x PE, with 5% growth. He likes growth at a reasonable price, so 5% doesn't cut it. Stock's moved below 200-day MA, which is falling. Short-term technicals look weak. Demand for GLP-1 drugs will impact a lot of companies in the food business.