Strategic Broth Acquisition Fails to Offset High Leverage and Growth Headwinds, Supporting Sell Rating on B&G Foods

In a report released yesterday, Robert Moskow from TD Cowen maintained a Sell rating on B&G Foods, with a price target of $3.50.

Robert Moskow has given his Sell rating due to a combination of factors tied to B&G Foods’ financial profile and growth outlook. While he views the acquisition of the College Inn and Kitchen Basics broth brands as strategically sound and attractively priced, he remains concerned that it does not fully offset the company’s broader structural issues. The acquired assets add meaningful sales, EBITDA, EPS, and free cash flow, and fit well alongside B&G’s existing Bear Creek dry soup mix line, but the underlying category trends and brand performance—particularly the recent double‑digit declines at College Inn—signal that execution risk remains elevated. In his view, stabilizing these brands will require sharper pricing and more effective promotions, which could limit the margin upside from the deal.

Moskow’s continued Sell recommendation is driven primarily by B&G’s high leverage and ongoing growth headwinds. Even with the incremental earnings and cash flow from the acquisition, he believes the balance sheet risk warrants a discounted valuation versus peers. His updated target price of $3.50 per share, despite being modestly higher to reflect the benefits of the transaction, is still below the current trading level implied by the Sell rating. Overall, he concludes that the strategic positives of this acquisition are not sufficient to change the risk‑reward profile of the stock, leaving limited upside and a cautious stance for investors.

Based on the recent corporate insider activity of 32 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of BGS in relation to earlier this year.