Sara Lee Corp.

Sara Lee Corp. (SLE - Analyst Report) gapped open on its strong Q1 results from early November on lower costs and strong North American sales, driving shares to a new 52-weke high above $12.

Company Description

Sara Lee develops and manufactures a wide range of branded packaged food products under brands like Sara Lee, Ball Park and Jimmy Dean worldwide. The company was founded in 1939 and has a market cap of $8.61 billion.

Shares of SLE have posted big gains this year, rallying with the market after bottoming out in early March. The company's first-quarter results, reported on Nov 4, gave shares an extra boost.

First-Quarter Results

Sales were down 7.4% from last year to $2.6 billion. But earnings came in better than expected at 32 cents, 15 cents ahead of the Zacks Consensus Estimate. The company has beat in each of the last 3 quarters by an average of 52%.

Sara Lee noted that its results were driven by a strong showing in North America and lower input costs on deflated commodity prices.

Estimates Advance

The solid quarter and optimistic view lifted estimates, with the current year adding 2 cents to 95 cents. The next-year estimate also added 2 cents, moving to $1.03, an 8% growth projection.

Valuation

Based on the current-year estimate, shares of SLE have a forward P/E multiple of 13, a discount to the overall market. Sara Lee also boasts a 3.6% dividend yield.

The Chart

Shares of SLE gapped open higher on the strong quarterly results, hitting a new 52-week high at $12.61. Since then, shares have traded mostly sideways, take a look below.

Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Surprise Trader Service.

Read the full analyst report on SLE