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 first quarter of fiscal 2010 compared to a net loss in the comparable prior-year period. Del Monte has been able to boost sales through continued emphasis on product and packaging innovation.
We therefore upgrade the shares of Del Monte to Outperform.Zacks Investment Research
