Tupperware shares up following analyst upgrade
Tupperware Brands Corp.'s stock jumped Thursday after it was upgraded by a Morgan Stanley analyst.
THE SPARK: Analyst Dara Mohsenian upgraded Tupperware to "Overweight" from "Equal-Weight" and put a $76 price target on the stock.
THE BIG PICTURE: Tupperware, based in Orlando, Fla., was long considered a company that relied on U.S. housewives to sell its products at home gatherings known as Tupperware parties. But the company has evolved over time and shifted its focus to emerging markets, which now account for two-thirds of its revenue.
THE ANALYSIS: Mohsenian argues that Tupperware is undervalued because it has consistently grown its profit, has a solid balance sheet, strong cash flow and little reinvestment risk. Critics say the maker of food-storage and other home products deserves a lower stock price because of its exposure to foreign-exchange fluctuations and its model of selling directly to customers. But Mohsenian argues that Tupperware has been able to increase its profit by 18 percent over the past four years under that model.
The analyst says Wall Street's estimates for Tupperware are too low.
SHARE ACTION: The stock jumped $3.57, or 6 percent, to $62.67 in afternoon trading. With Thursday's gains, its stock price is up more than 13 percent since Oct. 23.