Subscribe to RSSFortune Brands Cut to “Hold” at Goldman Sachs; Outlines Three Breakup Scenarios (FO)
Alcoholic beverage, home and security, and golf products maker Fortune Brands, Inc. ( FO ) on Wednesday saw its rating cut to “Hold” by analysts at Goldman Sachs, who outlined three potential breakup scenarios for the company to create shareholder value. The firm downgraded FO from “Buy” to “Hold,” noting that the company’s options as far as breaking up its unrelated businesses only imply a 9% upside. Goldman currently has a $62 price target on the stock, which had closed at $57.05 on Tuesday. In light of a recent 11% stake taken in FO by investor Bill Ackman’s Pershing Square Capital last week, Goldman sees three possible scenarios for how Fortune Brands could be broken up: A complete break-up scenario in which each business is sold (worth $55 per share), A spin-off of its spirits and golf business (a $64 per-share value), or A spin-off of its home & hardware and golf units, using proceeds for share buybacks (a $68 value). Additionally, Goldman Sachs cut its 2010 EPS estimates for FO from $2.84 to $2.81, 2011 from $3.70 to $3.66, and 2012 from $4.29 to $4.25. Fortune Brands shares fell 35 cents, or -0.61%, in premarket trading Wednesday. The Bottom Line The company has a 1.33% dividend yield, based on last night’s closing stock price of $57.05. The stock has technical support in the $50 price area. If the shares can continue the recent ascent, we see overhead resistance around the $61-$63 price levels. Fortune Brands, Inc. ( FO ) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars. Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .
Excerpt from:
Fortune Brands Cut to “Hold” at Goldman Sachs; Outlines Three Breakup Scenarios (FO)
- Orrex commences drilling at Golden Mile South
- AQC outlines Bowen Basin drill plans and company update
- Berenberg Bank weekly macro economic update
- Kentz Corporation - Interim statement and anticipates full year performance marginally ahead of expectations
- ACCC to target online price pacts
- Eastern Iron ltd announces Drilling results at Nowa Nowa
Counter
No Comments
[...] at Goldman Sachs, who outlined three potential breakup scenarios for the company to create … gold investment – Google Blog Search This entry was posted in Uncategorized and tagged Brands, Fortune, Goldman, Outlines, Sachs, [...]