BB&T Reiterates Buy Rating on Flowers Foods (FLO)

BB&T Capital Markets is out with a research report this afternoon, where it reiterates its Buy rating on Flowers Foods Inc. FLO; it has a $28.00 price target on the stock. The analysts cited a story by Bloomberg that said Sara Lee is close to an agreement to sell its NA fresh bakery business to Grupo Bimbo for roughly $900M–$1B. The deal could reportedly be announced as soon as this week. The analysts added that Flowers trades at approximately 1.0x sales and 7.6x our FY'11 EBITDA estimate, which they view as conservative. They believe it should arguably warrant a premium multiple to Weston in a takeout scenario, and certainly to Sara Lee, given its minimal union exposure. Further, its operations are meaningfully more efficient than Sara Lee's.