This post was originally published on this site
Investing.com — Out with the veggies patties, bring on the Twinkies!
Hostess Brands Inc (NASDAQ:TWNK) is up 1.5% after Stephens initiated it as a buy-equivalent alongside chip maker (the potato kind, not the tech kind) Utz Brands Inc (NYSE:UTZ), which jumped 5%.
Beyond Meat (NASDAQ:BYND), on the other hand, got a smackdown from BTIG, which downgraded the stock to neutral from buy as restaurant operators focus on chicken sandwiches to the detriment of fake and real beef. Shares of the plant-based meat maker are down 3%.
Utz is the only attractive “pure play” bet in the salty snacks category, according to Stephens, and has been growing more than 4% over the past five years, CNBC Pro reported.
Twinkie maker Hostess has room for margin improvement and continued de-leveraging, the firm said.
“Hostess is well positioned to achieve double-digit EPS growth in 2021, driven by sustained top-line growth, margin improvement and continued de-leveraging,” Stephens said.
“Menu innovation for the first half of this year (at the very least) is focused on chicken and not beef for many restaurant concepts, with the introduction of several chicken sandwiches across the quick-service space,” BTIG analyst Peter Saleh said in a note, according to StreetInsider. “Restaurant operators will remain focused on throughput over menu innovation, limiting adoption and sales growth through the foodservice channel this year.”
That, topped with retail channel growth won’t be enough to sustain the growth rate and hefty trading multiple in 2021, Saleh said.
International lockdowns, primarily across Europe, will also weigh on new partnerships and sales growth until a vaccine is widely available and dining rooms reopen.
