TR - Tootsie Roll's Q1 Revenues Turned Sour (Rating Downgrade)

2024-05-23 09:55:53 ET

Summary

• Tootsie Roll Industries reported a revenue decline in Q1 as higher pricing caused resistance from customers amid continued cost inflation.
• The company anticipates margin pressures to continue in 2024 and 2025 due to higher cocoa prices, causing financial turbulence.
• In light of a weak growth prior to high inflation, the valuation doesn't seem to provide a good enough cash flow yield as estimated by a DCF model.

Tootsie Roll Industries ( TR ) has reported the company’s final quarter of 2023, and Q1 results, after my previous analysis on the stock. The company reported a year-over-year decline in revenues in Q1 after eleven sequential quarters of growth, turning future revenue prospects downwards....

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