baked box cheese close up

TreeHouse Foods (NYSE:THS) Q3 Earnings: What Can You Expect?

in EARNINGS/INVESTING IDEAS by

TreeHouse Foods, Inc. (NYSE:THS) is scheduled to report Q3 earnings results before markets open for trading on November 5, 2020.

The company is expected to report earnings of $0.61/share on revenue of $1.066 billion. The consensus earnings per share (EPS) of $0.61/share is based on a poll of 11 analysts and represents a growth in eps of 11.7% over the same quarter last year, when the company reported earnings of $0.55/share.

The revenue forecast of $1.066 billion based on a poll of 10 analysts implies a year-over-year (YoY) growth in revenue of 0.8%. Last year the company reported $1.057 billion in revenue for the quarter.

Expected to report EPS growth of 11.7% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $1,065.57 $1,057.30 0.8%
EPS $0.61 $0.55 11.7%

Earnings Call Trends

Historically, management has exceeded analyst expectations 7 out of the last 8 tracked quarters, missed 1 quarter, and met expectations 1 quarter.

What are your expectations from TreeHouse Foods, Inc. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $0.48 $0.58 22.1% Beat
Q1, 2020 $0.33 $0.37 13.6% Beat
Q4, 2019 $1.10 $1.10 0% Met
Q3, 2019 $0.58 $0.55 −5.1% Missed
Q2, 2019 $0.29 $0.36 26.3% Beat
Q1, 2019 $0.11 $0.13 13.1% Beat
Q4, 2018 $0.96 $1.03 7.8% Beat
Q3, 2018 $0.55 $0.62 13.2% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by falling −4.6%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
August 6, 2020 $45.34 $43.25 −4.6% Decline
May 7, 2020 $50.84 $53.49 5.2% Increase
February 13, 2020 $46.07 $45.75 −0.7% Decline
November 7, 2019 $55.17 $49.09 −11.0% Decline

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −3.04, the model suggests that the company is not likely to be an earnings manipulator. A value of −3.04 implies a 0.1% chance of earnings manipulation.

Fundamentals And Technical Analysis

TreeHouse Foods, Inc. is currently trading at $39.45/share, down −2.1% for the day. The company is trading at approximately 70.9% of its 52-week high of $56.03/share. The company’s stock price is down −8.8% since the last earnings report and down −2.0% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 47.90 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NYSE:THS Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of −27.46 and a forward P/E multiple of 15.25.

TreeHouse Foods, Inc.’s current share price also implies a price-to-book (P/B) multiple of 1.23. The following table summarizes some other key fundamental ratios:

Data as of October 28, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $39.45
P/E Ratio −27.5x
P/E Ratio (Fwd) 15.2x
PEG Ratio −3.6
Total Debt / Total Capital 50.9%
Levered Free Cash Flow $307.1 million
EV / EBITDA 9.1x

Finbox

TreeHouse Foods, Inc. is a mid-cap stock with a market capitalization of $2.277 billion and a total enterprise value of $4.342 billion. The company operates in the Consumer Staples sector and the Food Products industry.

TreeHouse Foods, Inc. operates as a consumer packaged food and beverage manufacturer in the United States and internationally. The company operates through Baked Goods, Beverages, and Meal Solutions segments. The Baked Goods segment offers candies, cookies, crackers, in-store bakery products, pita chips, pretzels, refrigerated dough, retail griddle waffles, pancakes, French toasts, bars, and ready-to-eat cereals. The Beverages segment offers broths, liquid non-dairy creamers, non-dairy powdered creamers, powdered drinks, single serve hot beverages, specialty teas, and sweeteners. The Meal Solutions segment provides aseptic cheese and pudding products; baking and mix powders; hot cereals; jams, preserves, and jellies; macaroni and cheese; mayonnaise; Mexican, barbeque, and other sauces; pastas; pickles and related products; powdered soups and gravies; refrigerated and shelf stable dressings and sauces; skillet dinners; and table and flavored syrups. The company sells its products through various distribution channels, including grocery retailers and foodservice distributors, as well as food manufacturers and repackagers of foodservice products. TreeHouse Foods, Inc. was founded in 1862 and is based in Oak Brook, Illinois.

Expertise: financial modeling, mergers & acquisitions. Andy is also a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to do investment research. Andy’s background is in investment banking where he led the analysis on over 50 board advisory engagements involving mergers and acquisitions, fairness opinions and solvency opinions. Some of his board advisory highlights: - Sears Holdings Corp.’s $620 mm spin-off via rights offering of Sears Outlet, Hometown Stores and Sears Hardware Stores. - Cerberus Capital Management’s $3.3 bn acquisition of SUPERVALU Inc.’s New Albertsons, Inc. assets. Andy can be reached at andy@finbox.io or at +1 (516) 778-6257.

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