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The warn retirement of Hostess Brands Inc. Chief Executive Bill Toler has stirred an researcher hillside and a high 11.1% dump in a company’s stock, though many analysts trust a association will still do well.
The Twinkies primogenitor
TWNK, -11.13%
pronounced late Thursday that Toler would retire as CEO effective Mar 1, 2018, or even earlier if a deputy can be found. He will, however, stay on a company’s board.
Hostess has combined a subcommittee to oldster both inner and outmost possibilities for a job. Dean Metropoulos, executive authority of a board, will take adult additional duties during a transition period, a association said.
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The news sent Hostess shares plummeting in Friday trading. UBS downgraded a company’s batch to sell from neutral, reflecting “slowing difficulty trends, marketplace share detriment in a Sweet Baked Goods section (93% of profits), and new government turnover.”
UBS believes Toler is a “driving force” behind a company’s success, and joined with a new depart of a company’s arch handling officer Stuart Wilcox, analysts are cautious.
“[O]ur arch regard is Hostess’ core difficulty negligence and a cost to benefit incremental marketplace share is rising,” a note said.
UBS cut a cost aim to $11 from $16.
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However, other analysts are distant reduction endangered about a impact that Toler’s depart will have.
RBC Capital Markets confirmed a outperform rating, citing Toler’s continued participation on a board, his $1 million batch merger on Aug 11, “which [they] appreciate as a opinion of confidence,” and a halt assistance from Metropoulos, who RBC analysts call “perhaps a many hands-on authority in finished food.”
“In a view, Hostess stays both an advantaged top-line performer and a height for expansion within a broader snacking star by MA,” analysts led by David Palmer wrote.
RBC has a cost aim of $16 on Hostess’ stock.
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J.P. Morgan analysts and a people they spoke with also design Hostess will be looking for “large-scale MA” opportunities. The concerns that analysts there have are apart from a CEO news.
“We continue to trust that Street sales and gain before interest, taxes, debasement and amortization estimates for a third entertain are too high; and a deceleration in a core honeyed snacks category, along with new debility in quickness and singular non-static cost flex, are expected to expostulate top- and bottom-line misses,” analysts led by Joshua Levine wrote.
J.P. Morgan confirmed a neutral batch rating.
The FactSet accord is for third-quarter gain of 12 cents per share and sales of $199 million.
J.P. Morgan spoke with Toler, who pronounced a association is looking for a Kansas City-based personality “who can be partial of a ‘community, enlightenment and fabric’ of a association for years to come.” Toler has been travelling to Kansas City from Florida, according to SunTrust Robinson Humphrey, who also spoke with him.
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SunTrust analysts voiced warn and beating about Toler’s departure, though contend a “heavy lifting of a turnaround is finish and Toler’s imagination comes from turnarounds (this was his fourth), not using a day-to-day business.”
“We are confident, formed on a meetings with a extended government group over a past year that a business will not skip a kick in Toler’s absence,” analysts wrote.
SunTrust rates Hostess shares buy with a $20 cost target.
Hostess shares are down 24.5% for a final 3 months, though adult 8.4% for a past year. The SP 500 index
SPX, +0.09%
is adult scarcely 20% for a past 12 months.
