Yahoo Finance Bear of the Day: Tupperware Brands (TUP)
Tupperware Brands (TUP) is a Zacks Rank #5 (Strong Sell) that manufactures, markets, and sells design-centric preparation, storage, and serving solutions for the kitchen and home, as well as a line of cookware, knives, microwave products, microfiber textiles, water-filtration related items, and an array of products for on-the-go consumers under the Tupperware brand name
The stock hit $1.15 back in March of last year, but has since seen a move over to $35 a share. However, the stock has fallen from its heights and is starting to crack as both the fundamentals and the technicals look unhealthy.
About the Company
Tupperware is headquartered in Orlando, FL and employs over 10,000 people. The company was founded in 1946 and distributes its products to approximately 80 countries primarily through independent sales force members, including independent distributors, directors, managers, and dealers.
TUP is valued at $1.1 billion and has a Forward PE of 8. The company holds a Zacks Style Score of “A” in both Value and Momentum, but “C” in Growth.
Earnings Beat
The company reported in early May, seeing a nice 24% beat on expectations.The company also beat on revenues, seeing $460 million v the $434 million expected. The company did a nice job creating a more profitable company by selling non-core assets and reducing debt. However, that doesn’t speak to future earnings and while the stock reacted positively at first, it has since fallen lower. Let’s take a look at estimates as investors might be focusing on the future instead of this past quarter.
Tupperware Brands Corporation Price and EPS Surprise
Tupperware Brands Corporation price-eps-surprise | Tupperware Brands Corporation Quote
Estimates Falling
For the current year, estimates have fallen 13% over the last 60 days, from $3.26 to $2.83. For next year, estimates have fallen 18% over the same timeframe, from $4.19 to $3.41.
So while earnings looked good, analysts are lowering estimates, which has helped the stock drop.
The Technical Take
The bulls tired to hold the 200-day MA throughout March and April, but eventually failed in early May. The $25 level saw some support, but it didn’t last long and the stock has fallen to the $20 level.
While there might be a bounce coming, the stock really shows no support until the $15 level, another 25% lower from current levels. This $15 area would offer the 61.8% Fibonacci support and the support level shown in July. Investors who like the stock might want to hold off until that area.
In Summary
Tupperware had a monstrous run, but the momentum has died as the fundamentals have taken over. Investors should wait for estimates to tick higher or for technical support before the enter the stock.
For those looking for a consumer staples play, look to Newell Brands (NWL). The stock is a Zacks Rank #2 (Buy) that saw an EPS beat this quarter of over 100%.
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Tupperware Brands Corporation (TUP) : Free Stock Analysis Report
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