Section 1: Company Fundamentals

1.1 Company Overview and Performance summary

Company Overview:

Flowers Foods, Inc. (NYSE: FLO) is a producer and marketer of packaged bakery foods in the United States. The Company's products include breads, buns, rolls, snack items, bagels, English muffins, and tortillas and are sold under a variety of brand names, including Nature's Own, Dave's Killer Bread (DKB), Wonder, Canyon Bakehouse, Tastykake, and Mrs. Freshley's.

This US Inflation Report covers the Company Overview & Price performance, Summary table, Key positives & negatives, Key metrics, Company details, technical guidance & Stock recommendation, and Price chart.

Price Performance:

• FLO's share price has dropped by 2.88% in the past three months. On the other hand, in the long term, the stock has given a mere return of 1.52% over the past nine months.
• The stock is currently trading near to the lower end of its 52-week range of USD 26.12 and 52-week low price of USD 21.20, with the expectations of an upside movement if the current support level of USD22 holds.
• The price is currently between both its short-term (50-day) SMA and long-term (200-day) SMA, with the current RSI of around 55.06.

1.2 Summary Table

1.3 The Key Positives & Negatives

1.4 Key Metrics

In Q3 FY24, Flowers Foods (FLO) reported strong performance relative to industry medians, with a gross margin of 49.8%, significantly higher than the industry median of 30.0%. However, its EBITDA margin of 11.1% and operating margin of 7.6% were lower than the industry medians of 13.1% and 8.1%, respectively. FLO also outperformed in terms of pretax margin (7.2% vs. 4.9%) and net margin (5.5% vs. 4.1%). The company's effective tax rate was in line with the industry, at 24.0%.

Section 2: Flowers Foods Inc (NYSE: FLO) (“Buy” at the current market price of USD 22.55, as of November 29, 2024, 08:15 am PST)

2.1 Company Details

2.2 Technical Guidance and Stock Recommendation  

Markets are trading in a highly volatile zone currently due to certain macroeconomic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is November 29, 2024. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: The report publishing date is as per the Pacific Time Zone.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

 Resistance: A level at which the stocks prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

 Stop-loss: It is a level to protect against further losses in case of unfavorable movement in the stock prices.