Del Monte’s (DLM) long-term objectives are to achieve earnings growth in the range of 7% to 9% and topline growth in the range of 3% to 5%. However, the guidance for both earnings and revenues growth for fiscal 2010 exceed the long-term range, and are now expected to increase by approximately 15% and 4% to 6%, respectively.
Price increases implemented across the product portfolio helped Del Monte post strong profits during the third quarter of fiscal 2010. Del Monte has been able to boost sales through continued emphasis on product and packaging innovation.
We maintain our Outperform rating on the shares of Del Monte. Our target price is $17.00 or 13.9X 2010 EPS estimates, and shares of DLM currently have a Zacks #1 Rank.Zacks Investment Research
