BB&T Capital downgraded Chiquita Brands (CQB) to buy.
Analyst Heather Jones says based on lower-than-expected projected net cost savings for 2003 (mid-range of $19 million), she cut her $2.68 earnings per share estimate to $1.91. Jones still believes Chiquita is a true turnaround story, but says the timing is now pushed out further. Therefore, she downgraded from strong buy to reflect management's less favorable near-term cost reduction schedule.
Jones says she would be inclined to revise her estimates and rating should 2003 cost savings exceed her $25 million estimate, if banana pricing trends higher than she thought, and if the euro remains strong relative to the U.S. dollar. She has a $17 target.