Latest news with #FlowersFoods'
Yahoo
07-07-2025
- Business
- Yahoo
5 Revealing Analyst Questions From Flowers Foods's Q1 Earnings Call
Flowers Foods' first quarter results reflected ongoing challenges in the packaged bakery sector, as sales volumes and organic revenue declined amid persistent category headwinds. Management pointed to softer consumer demand and a shift toward value products, with CEO Ryals McMullian noting that "things actually weakened further than we had anticipated." The company maintained unit share, particularly in differentiated brands such as Dave's Killer Bread and its Keto offerings, but broader softness in traditional bread segments weighed on overall performance. Management acknowledged the difficult environment and highlighted that improvements are unlikely in the near term, citing a combination of consumer health trends and economic uncertainty. Is now the time to buy FLO? Find out in our full research report (it's free). Revenue: $1.55 billion vs analyst estimates of $1.60 billion (1.4% year-on-year decline, 2.7% miss) Adjusted EPS: $0.35 vs analyst expectations of $0.37 (6.3% miss) Adjusted EBITDA: $162 million vs analyst estimates of $167.9 million (10.4% margin, 3.5% miss) The company dropped its revenue guidance for the full year to $5.35 billion at the midpoint from $5.45 billion, a 1.8% decrease Management lowered its full-year Adjusted EPS guidance to $1.10 at the midpoint, a 6.4% decrease EBITDA guidance for the full year is $548 million at the midpoint, below analyst estimates of $570.2 million Operating Margin: 7.3%, in line with the same quarter last year Organic Revenue was down 3% year on year Sales Volumes fell 2.7% year on year (-0.8% in the same quarter last year) Market Capitalization: $3.40 billion While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. Jim Salera (Stephens) asked if unit share stabilization is likely in the near term. CEO Ryals McMullian responded that meaningful improvement is unlikely this year and may not occur until 2026, given current trends. Max Gumport (BNP Paribas) inquired about increased promotional activity and its implications for price mix. McMullian explained that Flowers Foods uses promotions selectively to drive trial, especially for differentiated brands, and avoids heavy discounting that could hurt long-term value. Mitchell Pinheiro (Sturdivant & Company) questioned the long-term EBITDA margin target given current margin compression. McMullian emphasized no change to the long-term outlook but acknowledged that progress may be slower due to near-term setbacks. Steve Powers (Deutsche Bank) asked about the performance and outlook for new product initiatives such as Simple Mills and DKB snacking. McMullian confirmed both are performing well but that guidance now incorporates consumer caution and macro pressures. Scott Marks (Jefferies) sought details on the impact of private label and away-from-home business weakness. McMullian noted foodservice softness but said restructuring has improved margins, while new private label contracts are expected to help regain lost volume. In the coming quarters, the StockStory team will be watching (1) early results from new product launches addressing health and wellness trends, (2) the company's ability to manage input cost pressures from tariffs and other inflationary factors, and (3) evidence of stabilization or improvement in bread category volumes and Flowers Foods' market share. The effectiveness of supply chain optimization efforts and progress in growing differentiated brands will also be important markers of success. Flowers Foods currently trades at $15.86, down from $17.06 just before the earnings. Is there an opportunity in the stock?The answer lies in our full research report (it's free). Market indices reached historic highs following Donald Trump's presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth. While this has caused many investors to adopt a "fearful" wait-and-see approach, we're leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
Yahoo
27-04-2025
- Business
- Yahoo
An Intrinsic Calculation For Flowers Foods, Inc. (NYSE:FLO) Suggests It's 46% Undervalued
Using the 2 Stage Free Cash Flow to Equity, Flowers Foods fair value estimate is US$32.76 Flowers Foods' US$17.85 share price signals that it might be 46% undervalued Analyst price target for FLO is US$20.63 which is 37% below our fair value estimate Today we'll do a simple run through of a valuation method used to estimate the attractiveness of Flowers Foods, Inc. (NYSE:FLO) as an investment opportunity by projecting its future cash flows and then discounting them to today's value. Our analysis will employ the Discounted Cash Flow (DCF) model. Don't get put off by the jargon, the math behind it is actually quite straightforward. We generally believe that a company's value is the present value of all of the cash it will generate in the future. However, a DCF is just one valuation metric among many, and it is not without flaws. If you still have some burning questions about this type of valuation, take a look at the Simply Wall St analysis model. AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early. We're using the 2-stage growth model, which simply means we take in account two stages of company's growth. In the initial period the company may have a higher growth rate and the second stage is usually assumed to have a stable growth rate. In the first stage we need to estimate the cash flows to the business over the next ten years. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years. Generally we assume that a dollar today is more valuable than a dollar in the future, so we need to discount the sum of these future cash flows to arrive at a present value estimate: 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Levered FCF ($, Millions) US$285.5m US$299.8m US$286.0m US$279.7m US$277.7m US$278.5m US$281.5m US$285.8m US$291.3m US$297.6m Growth Rate Estimate Source Analyst x2 Analyst x2 Analyst x1 Est @ -2.21% Est @ -0.72% Est @ 0.32% Est @ 1.05% Est @ 1.56% Est @ 1.92% Est @ 2.17% Present Value ($, Millions) Discounted @ 6.2% US$269 US$266 US$239 US$220 US$205 US$194 US$185 US$176 US$169 US$163 ("Est" = FCF growth rate estimated by Simply Wall St)Present Value of 10-year Cash Flow (PVCF) = US$2.1b We now need to calculate the Terminal Value, which accounts for all the future cash flows after this ten year period. For a number of reasons a very conservative growth rate is used that cannot exceed that of a country's GDP growth. In this case we have used the 5-year average of the 10-year government bond yield (2.8%) to estimate future growth. In the same way as with the 10-year 'growth' period, we discount future cash flows to today's value, using a cost of equity of 6.2%. Terminal Value (TV)= FCF2034 × (1 + g) ÷ (r – g) = US$298m× (1 + 2.8%) ÷ (6.2%– 2.8%) = US$8.8b Present Value of Terminal Value (PVTV)= TV / (1 + r)10= US$8.8b÷ ( 1 + 6.2%)10= US$4.8b The total value, or equity value, is then the sum of the present value of the future cash flows, which in this case is US$6.9b. The last step is to then divide the equity value by the number of shares outstanding. Relative to the current share price of US$17.9, the company appears quite good value at a 46% discount to where the stock price trades currently. The assumptions in any calculation have a big impact on the valuation, so it is better to view this as a rough estimate, not precise down to the last cent. The calculation above is very dependent on two assumptions. The first is the discount rate and the other is the cash flows. If you don't agree with these result, have a go at the calculation yourself and play with the assumptions. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Flowers Foods as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 6.2%, which is based on a levered beta of 0.800. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business. See our latest analysis for Flowers Foods Strength Earnings growth over the past year exceeded the industry. Debt is well covered by earnings and cashflows. Dividends are covered by earnings and cash flows. Dividend is in the top 25% of dividend payers in the market. Weakness No major weaknesses identified for FLO. Opportunity Annual earnings are forecast to grow for the next 3 years. Good value based on P/E ratio and estimated fair value. Threat Annual earnings are forecast to grow slower than the American market. Whilst important, the DCF calculation shouldn't be the only metric you look at when researching a company. The DCF model is not a perfect stock valuation tool. Rather it should be seen as a guide to "what assumptions need to be true for this stock to be under/overvalued?" For example, changes in the company's cost of equity or the risk free rate can significantly impact the valuation. What is the reason for the share price sitting below the intrinsic value? For Flowers Foods, we've compiled three important factors you should consider: Risks: Case in point, we've spotted 1 warning sign for Flowers Foods you should be aware of. Future Earnings: How does FLO's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart. Other High Quality Alternatives: Do you like a good all-rounder? Explore our interactive list of high quality stocks to get an idea of what else is out there you may be missing! PS. The Simply Wall St app conducts a discounted cash flow valuation for every stock on the NYSE every day. If you want to find the calculation for other stocks just search here. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Sign in to access your portfolio
Yahoo
06-04-2025
- Business
- Yahoo
With 74% ownership of the shares, Flowers Foods, Inc. (NYSE:FLO) is heavily dominated by institutional owners
Institutions' substantial holdings in Flowers Foods implies that they have significant influence over the company's share price 50% of the business is held by the top 15 shareholders Analyst forecasts along with ownership data serve to give a strong idea about prospects for a business AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early. A look at the shareholders of Flowers Foods, Inc. (NYSE:FLO) can tell us which group is most powerful. We can see that institutions own the lion's share in the company with 74% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company. Because institutional owners have a huge pool of resources and liquidity, their investing decisions tend to carry a great deal of weight, especially with individual investors. As a result, a sizeable amount of institutional money invested in a firm is generally viewed as a positive attribute. Let's take a closer look to see what the different types of shareholders can tell us about Flowers Foods. See our latest analysis for Flowers Foods Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing. Flowers Foods already has institutions on the share registry. Indeed, they own a respectable stake in the company. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Flowers Foods' historic earnings and revenue below, but keep in mind there's always more to the story. Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. We note that hedge funds don't have a meaningful investment in Flowers Foods. Our data shows that The Vanguard Group, Inc. is the largest shareholder with 11% of shares outstanding. With 8.6% and 4.3% of the shares outstanding respectively, BlackRock, Inc. and State Street Global Advisors, Inc. are the second and third largest shareholders. In addition, we found that A. McMullian, the CEO has 1.4% of the shares allocated to their name. A closer look at our ownership figures suggests that the top 15 shareholders have a combined ownership of 50% implying that no single shareholder has a majority. While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future. While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO. Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances. Our most recent data indicates that insiders own some shares in Flowers Foods, Inc.. The insiders have a meaningful stake worth US$297m. Most would see this as a real positive. If you would like to explore the question of insider alignment, you can click here to see if insiders have been buying or selling. The general public-- including retail investors -- own 19% stake in the company, and hence can't easily be ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders. It's always worth thinking about the different groups who own shares in a company. But to understand Flowers Foods better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Flowers Foods , and understanding them should be part of your investment process. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future . NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Yahoo
16-03-2025
- Business
- Yahoo
Flowers Foods, Inc.'s (NYSE:FLO) Fundamentals Look Pretty Strong: Could The Market Be Wrong About The Stock?
It is hard to get excited after looking at Flowers Foods' (NYSE:FLO) recent performance, when its stock has declined 11% over the past three months. But if you pay close attention, you might find that its key financial indicators look quite decent, which could mean that the stock could potentially rise in the long-term given how markets usually reward more resilient long-term fundamentals. Specifically, we decided to study Flowers Foods' ROE in this article. ROE or return on equity is a useful tool to assess how effectively a company can generate returns on the investment it received from its shareholders. In simpler terms, it measures the profitability of a company in relation to shareholder's equity. View our latest analysis for Flowers Foods ROE can be calculated by using the formula: Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity So, based on the above formula, the ROE for Flowers Foods is: 18% = US$248m ÷ US$1.4b (Based on the trailing twelve months to December 2024). The 'return' is the amount earned after tax over the last twelve months. Another way to think of that is that for every $1 worth of equity, the company was able to earn $0.18 in profit. Thus far, we have learned that ROE measures how efficiently a company is generating its profits. We now need to evaluate how much profit the company reinvests or "retains" for future growth which then gives us an idea about the growth potential of the company. Assuming everything else remains unchanged, the higher the ROE and profit retention, the higher the growth rate of a company compared to companies that don't necessarily bear these characteristics. To begin with, Flowers Foods seems to have a respectable ROE. Especially when compared to the industry average of 9.4% the company's ROE looks pretty impressive. Probably as a result of this, Flowers Foods was able to see a decent growth of 5.6% over the last five years. Next, on comparing with the industry net income growth, we found that Flowers Foods' reported growth was lower than the industry growth of 11% over the last few years, which is not something we like to see. The basis for attaching value to a company is, to a great extent, tied to its earnings growth. What investors need to determine next is if the expected earnings growth, or the lack of it, is already built into the share price. Doing so will help them establish if the stock's future looks promising or ominous. What is FLO worth today? The intrinsic value infographic in our free research report helps visualize whether FLO is currently mispriced by the market. The high three-year median payout ratio of 84% (or a retention ratio of 16%) for Flowers Foods suggests that the company's growth wasn't really hampered despite it returning most of its income to its shareholders. Besides, Flowers Foods has been paying dividends for at least ten years or more. This shows that the company is committed to sharing profits with its shareholders. Our latest analyst data shows that the future payout ratio of the company over the next three years is expected to be approximately 83%. Still, forecasts suggest that Flowers Foods' future ROE will rise to 29% even though the the company's payout ratio is not expected to change by much. On the whole, we do feel that Flowers Foods has some positive attributes. Its earnings have grown respectably as we saw earlier, which was likely due to the company reinvesting its earnings at a pretty high rate of return. However, given the high ROE, we do think that the company is reinvesting a small portion of its profits. This could likely be preventing the company from growing to its full extent. With that said, the latest industry analyst forecasts reveal that the company's earnings growth is expected to slow down. To know more about the company's future earnings growth forecasts take a look at this free report on analyst forecasts for the company to find out more. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
