Del Monte Stock Upgraded
Fitch Ratings upgraded Del Monte Foods Co. (DLM) nearly to investment grade, citing significant improvement in its credit statistics and operating fundamentals during the past two years.
Fitch said the company–known for its namesake fruit and vegetable brand–could be moved to investment grade if it maintains operating margins of 12.5% to 13%, has strong free cash flow and avoids large debt-financed acquisitions and share repurchases during the next 12 to 18 months.
Del Monte got a one-notch increase to BB+, one step below investment grade, and the outlook is positive, meaning further upgrade isn’t out of the question. Earlier this year, Moody’s Investors Service and Standard & Poor’s Ratings Services both upgraded Del Monte’s ratings one notch to two steps below investment grade.
Popularity: 8% [?]
