TreeHouse Earnings: Positioned for a Much Better Second Half, but Shares Are Fairly Valued

After reviewing no-moat TreeHouse Foods' second-quarter earnings release, we don't plan to make a significant change to our $37 per share fair value estimate. Results were largely within management's guidance, with sales of $789 million and adjusted EBITDA of $71 million compared with ranges of $770 million-$800 million and $55 million-$65 million, respectively. The back half of the year should be better due to favorable seasonality for much of Treehouse's portfolio. As such, management maintained full-year net sales guidance of $3.43 billion-$3.5 billion and narrowed adjusted EBTDA guidance by $10 million at the upper end to $360 million-$380 million. In comparison, our forecast before the earnings call is $3.47 billion and $379 million, respectively.