Morgan Stanley Previews Earnings For 3 Food & Tobacco Stocks

January 27, 2015

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Morgan Stanley previewed Q4 earnings for Mead Johnson Nutrition CO (NYSE: MJN), Hershey Co (NYSE: HSY) and Altria Group Inc (NYSE: MO) on Tuesday.

Analyst Matthew Grainger raised the price target on Mead Johnson Nutrition from $98 to $104 and maintained an Equal-weight rating.

The firm’s 4Q14 EPS estimate of $0.89 for MJN was $0.01 above consensus. Garinger was cautious on the 2015 EPS consensus of $4.13 due to FX headwinds, slowing growth in China and a higher tax rate.

Mead Johnson Nutrition CO reports earnings on January 29 and recently traded at $99.29, down 0.14 percent.

Grainger raised the price target on Hershey from $96 to $105 and saw it as one “the sector's largest beneficiaries from incremental dairy deflation (est. 10-15 percent of COGS from milk/butter) during the past quarter.”

The firm’s 4Q14 EPS estimate of $1.07 for Hershey was in line with consensus.

Hershey reports earnings on January 29 and recently traded at $108.78, down 0.37 percent.

For Altria Group, the firm maintained a price target of $48 and an Equal-weight rating. The firm’s 4Q14 EPS estimate of $0.66 was in line with consensus.

Grainger added that Altria’s “near-term earning outlook should benefit significantly from the recent expiration of the quota buyout, which provides a tailwind of over 500 bps and 400 bps to operating profit in 4Q14 and 2015, respectively.”

Altria Group reports earnings on January 30 and recently traded at $54.77, up 0.38 percent.