Nomad Foods (NOMD) Upgraded To Strong Buy: Should You Add?
Zacks Investment Research | Jun 06, 2017 10:44PM ET
On Jun 7, 2017, we upgraded Nomad Foods Limited (NYSE:NOMD) by a notch to a Zacks Rank #1 (Strong Buy) - manufacturer and distributor of frozen foods primarily in the U.K.
Key Attributes
Nomad produces, markets and distributes brands in 17 countries and has the leading market share in Western Europe.
Last month, the company reported strong first-quarter 2017 results on the back of decent organic revenue growth. Both the top and the bottom line surpassed the Zacks Consensus Estimate. Additionally, Nomad raised its 2017 revenue, EBITDA and free cash flow guidance.
Although the company’s first-quarter reported revenue decreased 2.9%, its organic revenue increased 1.1% (against 2.7% decline in fourth-quarter 2016 and 6.1% drop in the year-ago quarter), marking a return to positive growth trajectory. It was driven by 3% volume and mix growth, which was partly offset by 1.9% of negative pricing. This was primarily due to the company’s planned strategy to offer trade support alongside UK price increases.
Nomad's sales trends improved sequentially, helped by its focus on "must-win battles", which accounted for approximately 70% of revenues. The company’s top three markets U.K, Italy and Germany, experienced another quarter of sequential improved revenue trends.
Meanwhile, shares of the company have outperformed the Zacks categorized Zacks Investment Research
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