CIBC Analysts Maintained Sector Performer Rating On George Weston

Analysts at CIBC retained Sector Performer rating on the shares of George Weston Ltd. (Toronto: WN.TO) with a revised price target of $74, down from $78. They state that the firm produced a reasonable quarter, slightly above their forecast.

CIBC analysts believe that WN registered a reasonable quarter despite continual trouble on core bakery volume. The volume is linked to its primary customer Loblaw, which continues to struggle. They add that WN has done a good job taking price increases and controlling costs, and will continue to do so. They raise WN's EBITDA forecast slightly, and now look ahead to FY2012. They state that WN is undervalued at just 4.8x, but even with that the upside is limited to 12 percent.

In its fiscal 2011 third quarter, WN's net earnings rose to C$264 million, or C$1.94 a basic share, from C$176 million, or C$1.26 per basic share, a year ago. On an adjusted basis, the company earned C$1.44 per basic share. Sales rose 2.4 percent to C$10.06 billion. Sales at Weston Foods rose 10.3 percent to C$545 million.

WN through its subsidiaries, engages in food processing and distribution business. The company operates in two segments, Weston Foods and Loblaw. It has a market capitalization of $8.35 billion with a P/E ratio of 16.13.

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