Wall Street has issued downbeat forecasts for the stocks in this article.
These predictions are rare - financial institutions typically hesitate to say bad things about a company because it can jeopardize their other revenue-generating business lines like M&A advisory.
A number of stocks fell in the pre-market session after markets pulled back amid hotter-than-expected inflation data. The main concern for investors was the July Producer Price Index (PPI), a measure of wholesale inflation. The higher-than-expected reading suggests that companies could face squeezed profit margins due to rising costs. This also reduces the likelihood of the Federal Reserve cutting interest rates, which could further dampen economic activity. Compounding these inflation fears are multiple reports signaling a weakening consumer.
A number of stocks jumped in the afternoon session after markets continued to rally as a surprisingly subdued inflation report fueled hopes for an imminent interest rate cut from the U.S. Federal Reserve. The July Consumer Price Index (CPI) report showed a year-over-year increase of 2.7%, which was slightly below market expectations. This tamer-than-expected inflation data was viewed by investors as a key signal that price pressures are easing. As a result, the market has strengthened its conviction that the U.S. Federal Reserve will implement an interest rate cut in September. The prospect of lower borrowing costs tends to boost corporate profitability and can stimulate economic activity, creating a more favorable environment for consumer-facing companies and fueling a broad-based market rally.
Packaged foods company B&G Foods (NYSE:BGS) fell short of the market’s revenue expectations in Q2 CY2025, with sales falling 4.5% year on year to $424.4 million. The company’s full-year revenue guidance of $1.86 billion at the midpoint came in 0.5% below analysts’ estimates. Its non-GAAP profit of $0.04 per share was $0.02 below analysts’ consensus estimates.
A number of stocks jumped in the morning session after the release of a favorable Consumer Price Index (CPI) report, which showed inflation cooling more than anticipated. The July report from the Bureau of Labor Statistics indicated a year-over-year inflation rate of 2.7%, just below the 2.8% economists had forecast. This suggests that price pressures on consumers may be easing. Particularly beneficial for the sector was the news that the food index remained flat, with grocery prices even declining by 0.1% month-over-month. This development is seen as a positive for the profitability of food, beverage, and personal care companies, as lower input costs and increased consumer purchasing power could boost sales.
Stocks trading in the $1-10 range are generally smaller players with less risk than their penny stock counterparts.
But that doesn’t mean the underlying businesses are cheap, and we advise caution as many have questionable fundamentals.
Packaged foods company B&G Foods (NYSE:BGS) fell short of the market’s revenue expectations in Q2 CY2025, with sales falling 4.5% year on year to $424.4 million. The company’s full-year revenue guidance of $1.86 billion at the midpoint came in 0.5% below analysts’ estimates. Its non-GAAP profit of $0.04 per share was $0.02 below analysts’ consensus estimates.
The stocks in this article have caught Wall Street’s attention in a big way, with price targets implying returns above 20%.
But investors should take these forecasts with a grain of salt because analysts typically say nice things about companies so their firms can win business in other product lines like M&A advisory.
Shares of packaged foods company B&G Foods (NYSE:BGS)
fell 3.9% in the afternoon session after the stock continued to be weighed down by negative investor sentiment, evidenced by a recent significant increase in bets against the company. The pressure on the packaged foods company comes as data shows a recent 11.2% rise in short interest. Short interest represents the number of shares that investors have sold short, a strategy used to profit from a stock's decline. A notable increase in this metric indicates that a growing number of market participants are anticipating further weakness in the share price. This pessimistic outlook is fueled by underlying business concerns.
Value stocks typically trade at discounts to the broader market, offering patient investors the opportunity to buy businesses when they’re out of favor.
The key risk, however, is that these stocks are usually cheap for a reason – five cents for a piece of fruit may seem like a great deal until you find out it’s rotten.
Stability is great, but low-volatility stocks may struggle to deliver market-beating returns over time as they sometimes underperform during bull markets.
Consumer staples stocks are solid insurance policies in frothy markets ripe for corrections. But recently, the industry has failed to do its job as it shed 10.8% over the past six months. This performance was especially disheartening since the S&P 500 held its ground.
Packaged foods company B&G Foods (NYSE:BGS) missed Wall Street’s revenue expectations in Q1 CY2025, with sales falling 10.5% year on year to $425.4 million. Its non-GAAP profit of $0.04 per share was 74.2% below analysts’ consensus estimates.
Investors can certainly boost their returns by concentrating on stocks trading between $1 and $10.
However, a disciplined approach is necessary because many of these businesses are speculative and lack the underlying fundamentals to support their prices.
A number of stocks jumped in the afternoon session after the major indices rebounded (Nasdaq +2.0%, S&P 500 +2.0%) as President Trump postponed the planned 50% tariff on European Union imports, shifting the start date to July 9, 2025.
Wall Street has set ambitious price targets for the stocks in this article.
While this suggests attractive upside potential, it’s important to remain skeptical because analysts face institutional pressures that can sometimes lead to overly optimistic forecasts.
As the craze of earnings season draws to a close, here’s a look back at some of the most exciting (and some less so) results from Q1. Today, we are looking at shelf-stable food stocks, starting with B&G Foods (NYSE:BGS).
