JPMorgan Upgrades Dean Foods to Overweight

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JPMorgan Upgrades Dean Foods to Overweight
The stock upgrade was also attributed to the shares’ “appealing valuation.”
Last month, Dean Foods saw its stock fall on weak fourth-quarter results
and lower-than-expected profit forecasts, partially blamed on softened demand for milk and increased investment in an organic milk joint venture.
Dairy and soy products industry leader Dean Foods Co. (DF) saw its stock jump 3% on Friday after
analysts at investment bank J. P. Morgan issued a bullish note on the firm’s growth prospects.
The maker of Dairy Pure and TruMoo milk joins peers in struggling with milk volume
down 1.2% year over year (YOY) in the fourth quarter, according to USDA data.
Along with the positive rating, J. P. Morgan hiked its price target on shares of the multinational food
and beverage giant from $20 to $22, compared to the stock’s closing price of $19.31 on Friday.
Despite forecasting a 20% inflation rate in the dairy commodity space
and a 1% decline in total volume performance over last year, Dean Foods hopes to invest in long-term growth through strategic initiatives and brand building.
Morgan highlighted lower dairy costs and margin positive sales from conventional
milk as factors presenting upside for Dean Foods in the upcoming period.

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