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4 Food Stocks With Over 25% Gains This Year Still Have Room to Run
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Year 2022 has not been completely rosy for companies in the food space, thanks to the rising cost of inflation and supply-chain disruptions that got exacerbated by the Ukraine war. Despite these factors, there are players in the food universe that have depicted a splendid run on the bourses, driven by their robust pricing endeavors to combat cost inflation.
Food companies have been grappling with an increased cost of ingredients, packaging and transportation. The increased cost of labor due to shortages has also been concerning. To counter these headwinds, players have been resorting to raising product prices, and undertaking stronger saving and restructuring measures. These, combined with favorable consumer demand, have been working as a win-win for several companies.
Elevated at-home consumption habits formed since the pandemic has been benefiting food companies’ retail operations. Their foodservice businesses have also been witnessing increased sales, with people heading out and getting back to routine. Companies have been making the most of the rising demand through constant brand-building efforts, including innovation and acquisitions.
All said, we have pointed out four food stocks, which have rallied more than 25% this year. These stocks are well-placed to continue with their solid momentum on the back of their strong brand images and efficient pricing actions, which are much needed in the current inflationary scenario.
Image Source: Zacks Investment Research
4 Stocks Worth a Look
Archer Daniels Midland Company (ADM - Free Report) has seen its shares rise 37.5% this year. On its third-quarter 2022 earnings call, management stated that ADM is well-poised to conclude 2022 on a solid note, continuing the momentum into 2023. The company’s third-quarter results were bolstered by robust global demand, gains from the integrated global value chain, a solid product portfolio and ADM’s team expertise in navigating dynamic market conditions.
Archer Daniels has been significantly progressing on its three strategic pillars — optimize, drive and growth. The Zacks Rank #1 (Strong Buy) company has been gaining from the robust performance in its Nutrition segment. The Zacks Consensus Estimate for ADM’s 2023 earnings per share has increased from $6.32 to $6.34 over the past seven days. The company has a long-term EPS growth rate of 7.2%.
MGP Ingredients, Inc. (MGPI - Free Report) operates through Distillery Products, Branded Spirits and Ingredient Solutions. The company’s Ingredient Solutions segment has been benefiting from consumers’ shift toward plant-based foods, which led to record segment sales in the third quarter of 2022. The strength of the company’s business model remains an upside.
MGPI raised its 2022 guidance when it reported the third-quarter results. This reflects its strong prospects. The Zacks Consensus Estimate for MGP Ingredients’ 2023 earnings per share has increased from $5.02 to $5.07 over the past 60 days. The Zacks Rank #2 (Buy) company’s shares have jumped 27.8% in the year-to-date period.
Campbell Soup Company (CPB - Free Report) raised its fiscal 2023 guidance when it posted the stellar first-quarter fiscal 2023 results on Dec 7. The solid results were attributed to brand strength, inflation-driven pricing and continued supply recovery. Campbell Soup has been benefitting from its growing Snacks business. Also, CPB’s cost-saving plan has been working well. Management is on track to deliver savings worth $1 billion by the end of fiscal 2025.
This Zacks Rank #3 (Hold) stock has risen 29.2% so far this year. The Zacks Consensus Estimate for Campbell Soup’s fiscal 2023 earnings per share has increased from $2.90 to $2.99 over the past 30 days. The company has a long-term EPS growth rate of 3.4%.
Lamb Weston Holdings, Inc. (LW - Free Report) has been benefiting from robust price/mix, buoyed by pricing actions undertaken in the company’s core business segments to counter input, manufacturing and transportation cost inflation. On its first-quarter fiscal 2023 earnings call, management highlighted that while the macro environment remains volatile, it is on track to deliver results at the high end of the sales target of $4.7-$4.8 billion, with pricing driving growth.
Apart from this, Lamb Weston’s efforts to boost offerings and expand capacity have been enabling the company to effectively meet rising demand conditions for snacks and fries. LW, which currently carries a Zacks Rank of 3, has seen its stock soar 38.4% in the year so far. The Zacks Consensus Estimate for fiscal 2023 earnings per share has been unchanged over the past 30 days. The company has a long-term EPS growth rate of 26.7%.
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4 Food Stocks With Over 25% Gains This Year Still Have Room to Run
Year 2022 has not been completely rosy for companies in the food space, thanks to the rising cost of inflation and supply-chain disruptions that got exacerbated by the Ukraine war. Despite these factors, there are players in the food universe that have depicted a splendid run on the bourses, driven by their robust pricing endeavors to combat cost inflation.
Food companies have been grappling with an increased cost of ingredients, packaging and transportation. The increased cost of labor due to shortages has also been concerning. To counter these headwinds, players have been resorting to raising product prices, and undertaking stronger saving and restructuring measures. These, combined with favorable consumer demand, have been working as a win-win for several companies.
Elevated at-home consumption habits formed since the pandemic has been benefiting food companies’ retail operations. Their foodservice businesses have also been witnessing increased sales, with people heading out and getting back to routine. Companies have been making the most of the rising demand through constant brand-building efforts, including innovation and acquisitions.
All said, we have pointed out four food stocks, which have rallied more than 25% this year. These stocks are well-placed to continue with their solid momentum on the back of their strong brand images and efficient pricing actions, which are much needed in the current inflationary scenario.
Image Source: Zacks Investment Research
4 Stocks Worth a Look
Archer Daniels Midland Company (ADM - Free Report) has seen its shares rise 37.5% this year. On its third-quarter 2022 earnings call, management stated that ADM is well-poised to conclude 2022 on a solid note, continuing the momentum into 2023. The company’s third-quarter results were bolstered by robust global demand, gains from the integrated global value chain, a solid product portfolio and ADM’s team expertise in navigating dynamic market conditions.
Archer Daniels has been significantly progressing on its three strategic pillars — optimize, drive and growth. The Zacks Rank #1 (Strong Buy) company has been gaining from the robust performance in its Nutrition segment. The Zacks Consensus Estimate for ADM’s 2023 earnings per share has increased from $6.32 to $6.34 over the past seven days. The company has a long-term EPS growth rate of 7.2%.
You can see the complete list of today’s Zacks #1 Rank stocks here.
MGP Ingredients, Inc. (MGPI - Free Report) operates through Distillery Products, Branded Spirits and Ingredient Solutions. The company’s Ingredient Solutions segment has been benefiting from consumers’ shift toward plant-based foods, which led to record segment sales in the third quarter of 2022. The strength of the company’s business model remains an upside.
MGPI raised its 2022 guidance when it reported the third-quarter results. This reflects its strong prospects. The Zacks Consensus Estimate for MGP Ingredients’ 2023 earnings per share has increased from $5.02 to $5.07 over the past 60 days. The Zacks Rank #2 (Buy) company’s shares have jumped 27.8% in the year-to-date period.
Campbell Soup Company (CPB - Free Report) raised its fiscal 2023 guidance when it posted the stellar first-quarter fiscal 2023 results on Dec 7. The solid results were attributed to brand strength, inflation-driven pricing and continued supply recovery. Campbell Soup has been benefitting from its growing Snacks business. Also, CPB’s cost-saving plan has been working well. Management is on track to deliver savings worth $1 billion by the end of fiscal 2025.
This Zacks Rank #3 (Hold) stock has risen 29.2% so far this year. The Zacks Consensus Estimate for Campbell Soup’s fiscal 2023 earnings per share has increased from $2.90 to $2.99 over the past 30 days. The company has a long-term EPS growth rate of 3.4%.
Lamb Weston Holdings, Inc. (LW - Free Report) has been benefiting from robust price/mix, buoyed by pricing actions undertaken in the company’s core business segments to counter input, manufacturing and transportation cost inflation. On its first-quarter fiscal 2023 earnings call, management highlighted that while the macro environment remains volatile, it is on track to deliver results at the high end of the sales target of $4.7-$4.8 billion, with pricing driving growth.
Apart from this, Lamb Weston’s efforts to boost offerings and expand capacity have been enabling the company to effectively meet rising demand conditions for snacks and fries. LW, which currently carries a Zacks Rank of 3, has seen its stock soar 38.4% in the year so far. The Zacks Consensus Estimate for fiscal 2023 earnings per share has been unchanged over the past 30 days. The company has a long-term EPS growth rate of 26.7%.