Zacks Investment Research downgraded shares of The Middleby Corporation (MIDD) from OUTPERFORM to NEUTRAL on March 01, 2013, with a target price of $157.00.
Middleby's earnings per share in the fourth quarter of 2012 came in at $2.03, outpacing the year-ago earnings and Zacks Consensus Estimate of $1.87 and $1.78, respectively. The main catalyst to the increase in revenue was the acquisitions undertaken by the company, contributing around 11.3% growth. Revenue also got a boost from the increasing sales in emerging economies like Asia and Latin America. Also, the new technologies developed by the company had a significant contribution, which is expected to grow further in the future. However, difficult operating conditions in Europe negatively impacted revenue. Moreover, the company's exposure to currency rate fluctuations cannot be overlooked. Also, a negative trend in the global economy forces down consumer spending, leading to a loss of business to the food outlets. This will hamper the earnings for Middleby. Based on the above factors, we prefer to remain on the sidelines and maintain a Neutral recommendation on the stock.
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