Should you buy the decline in NOMD ahead of next month’s earnings report?
Nomad Foods Ltd (NYSE: NOMD) is one of the largest frozen food manufacturers in Europe. The UK based company has a global portfolio of food companies and brands in the frozen food category and the broader food sector. Her portfolio of brands includes Birds Eye, Findus, iglo, Aunt Bessie’s and Goodfella’s.
NOMD has been down from its record high of $ 31.85 in early June and is being led down by its 20-day moving average. However, the stock’s 200-day moving average holds some of today’s negative price action in check, and the trendline helped contain a sharp pullback in February. Since the start of the year, equity has increased 5.9%, although it has lost about 15% since its peak above.
Nomad Foods is expected to announce its earnings for the second quarter prior to opening on Wednesday, August 4th. NOMD shone in profit commitments last year, beating the profit estimates of all four most recently published reports. For the second quarter of 2020, Nomad Foods beat analyst estimates by $ 0.05 and reported earnings per share (EPS) of $ 0.40. For the third quarter of 2020, the food company’s earnings per share fell to $ 0.37 but still beat expectations with a margin of $ 0.03. For the fourth quarter of 2020, Nomad Foods posted earnings up to $ 0.46 per share, beating estimates by a margin of $ 0.01. For the first quarter of 2021, Nomad Foods reported earnings per share of $ 0.56, beating expectations with a margin of $ 0.10. Analysts currently expect NOMD to report reduced earnings per share of $ 0.38 for its upcoming earnings report in early August.
Nomad Foods stock has a trailing price / earnings ratio of 19.47 and a future price / earnings ratio of 14.90, suggesting the company is fairly valued given overall sales and net earnings growth. Since fiscal 2017, Nomad Foods has increased sales by around 30% and net profit by 67%. On a slightly less positive note, however, Nomad Foods has total debt of about $ 1.85 billion, compared to just $ 479.2 million on its balance sheet. That said, NOMD has strong growth potential and a fair valuation, making Nomad Foods stock a solid short- and long-term investment.