Jefferies Lowers Guidance On TreeHouse Foods

According to Jefferies, TreeHouse Foods THS lowered FY11 EPS guidance by 8-10 cents as the pricing benefit will come later than previously expected. Jefferies said that retailers are pushing back more against multiple rounds of price increases given the state of the economy and consumer, confirming our cautious pricing outlook for the industry. “We are valuing THS at close to 19 times forward earnings and are maintaining our $59 target price. Risks include (1) an M&A driven growth strategy, (2) commodity cost volatility, (3) pricing uncertainty and (4) the ongoing management transition” TreeHouse Foods closed yesterday at $54.10.