Tupperware Brands Corporation

TUP Details

Tupperware Brands Corporation (NYSE: TUP) is a prominent worldwide consumer goods firm that creates inventive, functional, and environmentally friendly products. The company sells its products in roughly 70 countries, mainly through a global network of approximately 3.1 million independent sales force members, of which around 553 thousand are active at any given time.

Latest News:

• Share Repurchase Program: On February 28, 2022, TUP stated that it had reached a deal to repurchase USD 75 million of its common stock in an expedited share repurchase program. On February 25, 2022, the closing price equates to roughly 4.6 million shares or approximately 8.7% of TUP's fully diluted common stock.

FY21 Results:

• Growth in Revenues: TUP increased net sales by 2.86% to USD 1.60 billion in FY21 (ended December 25, 2021), up from USD 1.56 billion in FY20 (ended December 26, 2020), owing to growth in all regions except Asia Pacific area.
• Drop in the bottom line: In FY21, the company reported a fall in net income to USD 18.6 million vs. USD 112.2 million in FY20, due to losses incurred on the sale of assets and dispositions.
• Decent Balance Sheet: As of December 25, 2021, the company had cash and cash equivalents of USD 267.2 million and total debt (including finance lease obligation) of USD 709.4 million.

Key Risks:

• Exchange Rate Fluctuation: TUP does business in various currencies other than the US dollar, putting it exposed to currency changes. Even if currency futures contracts have been used to offset price changes, the risk still exists. Any unfavourable change in the exchange rate would harm the company's finances.

Valuation Methodology: Price/Earnings Per Share Based Relative Valuation

 (Analysis by Kalkine Group)

* % Premium/(Discount) is based on our assessment of the company's FY1 trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.

Stock Recommendation:

TUP's stock price has been volatile throughout the year, rising 29.33% in the past three months and is currently leaning towards the mid-band of its 52-week range of USD 13.28 to USD 29.20. We have valued the stock using the Price/Earnings-based relative valuation methodology and arrived at a target price of USD 21.52.

Considering the surge in the stock price in a brief span, share repurchase program, growth in topline, current valuation, and associated risks, we recommend a "Hold" rating on the stock at the closing price of USD 19.58, up 4.37% as of March 28, 2022.

Three-Year Technical Price Chart (as of March 28, 2022). Source: REFINITIV, Analysis by Kalkine Group

* The reference data in this report has been partly sourced from REFINITIV.

* All forecasted figures and industry information have been taken from REFINITIV.