MIDD - Embedded Expectations Analysis - 2020 07 24
The Middleby Corporation (MIDD:USA) currently trades near recent averages relative to UAFRS-based (Uniform) earnings, with a 20.8x Uniform P/E. At these levels, markets have bearish expectations for the firm, and management may be concerned about continued coronavirus headwinds, international weakness, and overall demand trend changesSpecifically, management may lack confidence in the sustainability of order recovery, and expectations for store reopenings in international and emerging markets. In addition, they may be concerned about continued earnings drag from the Deutsche and RAM acquistions, and about headwinds in the international side of their Residential segment. Moreover, they may have concerns about the sustainability of growth in the Food Processing segment, and might be concerned about the potential for increased use of used equipment going forward. Furthermore, they may be concerned about the permanence of dining changes made during coronavirus, and may be exaggerating the value proposition of equipment technologies across their business. Finally, they may lack confidence in the sustainability of their backlog and pipeline of orders, and about their ability to reduce the workforce efficiently
Middleby is engaged in the design, manufacture, marketing, distribution, and service of a line of foodservice equipment, food preparation, cooking, baking, chilling and packaging equipment, and kitchen equipment. The company's segments are: the Commercial Foodservice Equipment Group, which provides foodservice equipment to serve cooking, warming, refrigeration, freezing and beverage application within a commercial kitchen or foodservice operation; the Food Processing Equipment Group, which provides processing solutions for customers producing pre-cooked meat products; and the Residential Kitchen Equipment Group, which manufactures, sells and distributes kitchen equipment for the residential market.
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- GAAP and IFRS have failed to provide rules for reliable financial statement reporting
- Stock analyst recommendations are not grounded in disciplined financial analysis
- Credit agencies have been set up to grossly fail in their responsibilities to investors and the public markets
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