Some serious due diligence on Diamond Foods, including accouting audits and visits with the farmers who supply inventory, was released in a report from KeyBanc CapitalMarkets, prompting the stock to surge on Friday.
"Our price target is $76 over the next year. Even with the pop on the stock today, we think there is tremendous upside," said Akshay Jagdale, packaged foods analyst with Keybanc Capital Markets.
This sudden upside is based on news that the company's internal accounting probe, which began late September, has checked out okay, and thus, their planned deal to buy Proctor & Gamble's Pringles potato chips is likely to go through.
With Pringles, Diamond gains access to new markets, and their supply chains, outside of the US.
"Pringles is a great strategic fit adding to our portfolio the world's largest potato crisp brand with nearly $1.4 billion in sales in 140 countries," said Michael Mendes, CEO of Diamond Foods, in a recent press release.
Diamond Foods stock closed up nearly 53 percent Friday.The surge is an about-face for the company, whose stock has been hammered in trading over the past few months, falling over $60 since September. The market seems to have already priced in the bad news.Page 1 of 2 | Next Page