2Q Beats by 11 Cents; Raising Rating to Gradually Accumulate (from Hold)
2Q18 (June) adjusted EPS was $1.57 (vs $1.39), up 13% and 11 cents above our forecast due to sales $37 million (or 6%) more than what we modeled.
Our 2018 EPS estimate is now $6.23 (from $6.20), up 14% from a record 2017, aided by a 25% projected tax rate (vs 31% last year.
For 2019, our EPS estimate is now $7.14 (from $7.04), up 15% from our 2018 projection.
With improving results in Commercial FoodService, momentum at Viking, a rebound expected in Food Processing, benefits anticipated from acquired Taylor, and the salesforce restructuring, we are raising our rating to Gradually Accumulate (from Hold). Our 12-month price target is $139, where the shares would be trading at 21x our 12-month forward EPS estimate of $6.62.
Great Lakes Review is located in Cleveland, Ohio, was founded in 1981 and became a division of Wellington Shields & Co. LLC in 2011. Great Lakes Review is a research boutique focused on the fundamentally-oriented investor seeking companies that dominate their respective specialty niche regardless of industry. The objective is to make money for the long-term by gradually accumulating a diversified portfolio from a universe of no more than 30 companies. Although short-term-oriented accounts will be alerted to trading opportunities, aggressive sell recommendations are triggered only by a deterioration in long-term fundamentals, not by short-term blips or investor fancy. Coverage of those names that lose their earnings momentum or earnings predictability may be dropped and replaced with more vital candidates.
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