Tupperware Brands Corporation

TUP Details

Tupperware Brands Corporation (NYSE: TUP) is a consumer goods company based in the United States that creates innovative and environmentally friendly products. Under the trademark "Tupperware," TUP manufactures and distributes culinary, home storage, and cosmetic products. It primarily sells its products through 3.2 million independent distributors in about 80 countries. Furthermore, through the direct-to-consumer channel, its products are sold directly to consumers by a separate sales force outside traditional retail outlets.

Latest News:

• Taking Steps Towards Sustainability: Tupperware Brands Foundation, TUP's non-profit arm, announced on Jan. 27, 2022, that it would continue to support the National Park Foundation (NPF) with a multi-year donation of USD 2 million to make a significant impact across the National Park System. National parks are seeing an increased burden on resources, particularly trash infrastructure since they welcome more than 300 million people every year. To help address these issues, the NPF created the Resilience & Sustainability initiative to assist the National Park Service (NPS) in making park infrastructure more sustainable and efficient for future generations.

 9MFY21 Results:

• Improvement in Revenues: TUP reported YoY growth of 8.82% in net sales to USD 1.21 billion in 9MFY21 (ended September 25, 2021), from USD 1.11 billion in 9MFY20 (ended September 26, 2020), attributable to growth in all geographies except the Asia Pacific region.
• Reported Net Losses: During 9MFY21, the company reported a net loss of USD 5.2 million, vs. a net income of USD 90.4 million in 9MFY20.
• Decent Balance Sheet: As of September 25, 2021, the company had cash and cash equivalents of USD 123.8 million and total debt (including finance lease obligation) of USD 678.4 million.

Key Risk:

• Exchange Rate Fluctuation: TUP conducts business in various currencies other than the USD, exposing it to currency fluctuations. Though it has taken currency forwards contract to mitigate the change in prices, still this risk persists. Any unfavourable change in the exchange rate would harm the company's financials.

Valuation Methodology: Price/Earnings Per Share Based Relative Valuation

(Analysis by Kalkine Group)

* % Premium/(Discount) is based on our assessment of the company's NTM 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 surged 24.55% in the past month; however, it has increased 0.50% in the past three months, showing momentum in the stock is quite strong. It is currently leaning towards the lower band of its 52-week range of USD 13.28 to USD 34.34. We have valued the stock using the Price/Earnings-based relative valuation methodology and arrived at a target price of USD 20.17.

Considering the movement in the stock price, strong profitability margin, growth in topline, current valuation, and associated risks. We recommend a "Hold" rating on the stock at the current price of USD 18.11, up 2.84% as of February 15, 2022, 11:55 AM ET.

Three-Year Technical Price Chart (as on February 15, 2022, at 11:55 AM ET). 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.