Shares of Maple Leaf Foods (TSE: MFI) dropped 1o% on Thursday morning after the company reported a lower profit in the fourth quarter than a year ago.
Canada’s leading consumer protein company said it faced rising labor and production costs.
Sales & Earnings
Total company sales came in at C$1.12 billion for the quarter ended December 31, a decrease of 0.8% from C$1.13 billion in the prior-year quarter. Meat protein group sales increased 8.2%, while plant protein group sales fell by 3.7%.
Q4 2021 net earnings were C$1.9 million (C$0.02 per share), compared to C$25.4 million (C$0.20 per share) in Q4 2020.
On an adjusted basis, Maple Leaf earned C$0.09 per share in the fourth quarter of 2021, down 71% from an adjusted profit of C$0.31 a year earlier.
CEO Commentary
Maple Leaf president and CEO Michael H. McCain said, “In a challenging environment we delivered another record year in 2021 in our Meat Protein business. While Q4 saw an unexpected tornado of supply chain chaos driven by the Omicron COVID variant, our team is resilient and we expect this storm to pass quickly. For the year, Meat Protein sales grew 8% and we delivered record Adjusted EBITDA of $527 million.”
Wall Street’s Take
Three days ago, BMO Capital analyst Peter Sklar kept a Buy rating on MFI with a C$45.90 price target. This implies 61.3% upside potential.
Overall, consensus on the Street is that MFI is a Strong Buy based on three Buys. The average Maple Leaf Foods price target of C$45.30 implies 59.2% upside potential to current levels.
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