Maple Leaf Foods Inc (MFI) shares dropped more than 4% Wednesday morning despite Canada’s leading consumer protein company reporting a rise in first-quarter sales and profit. Lower plant protein sales might have weighed on MFI shares.
Maple Leaf’s sales came in at C$1.05 billion for the quarter ended March 31, increasing 3% from C$1.02 billion in the prior-year quarter. Meat protein group sales increased 3.3%, while plant protein group sales fell by 8.1%.
Meanwhile, 1Q 2021 net earnings were C$47.7 million (C$0.39 per diluted share), compared with a loss of C$3.7 million (C$0.03 per diluted share) in the first three months of 2020. On an adjusted basis, Maple Leaf earned C$0.26 per share in the first quarter of 2021, up 23.8% from an adjusted profit of C$0.21 a year earlier.
Maple Leaf’s President and CEO Michael H. McCain said, “Our number one priority is to keep our people healthy during this global crisis, and beyond. At the same time, we are delivering on our financial commitments, including both significant revenue growth and margin expansion in our meat protein business, while re-investing for extremely high long-term revenue growth in the strategically important plant protein business.”
In 2021, Maple Leaf expects to achieve mid-to-high single-digit sales growth in the meat protein group. As for the plant protein group, the company expects sales growth for the year to be broadly in line with the strategic objective of 30%. (See Maple Leaf Foods Inc stock analysis on TipRanks)
In April, Canaccord Genuity analyst Derek Dley reiterated a Buy rating on MFI with a C$40.00 price target (50% upside potential).
Overall, the consensus on the Street is that MFI is a Strong Buy based on 5 Buys and 1 Hold. The average analyst price target of C$37.08 implies a 39% upside potential to current levels. Shares have fallen by approximately 5% year-to-date.