Hostess Brands (NASDAQ:TWNK) got a bullish rating today from Evercore ISI, along with a price target of $18 per share, over 40% higher than the company's stock value when the rating was given. Even after ending the day up at $13.64, the stock still has the potential for an approximate 32% rise, according to the research firm.

Evercore based its upbeat forecasts on multiple factors in Hostess' recent performance. These include high potential profits in its convenience and snack food sectors once the coronavirus pandemic abates, fast growth in revenue, and good execution with the integration of the Voortman cookie business. Evercore says Hostess stands to possibly gain even more than its projected $40 million to $50 million in fiscal 2022 synergy benefits.

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The analysis firm also points out Hostess' relative financial health, with debt leverage of less than 4, and the fact that its shares are currently trading at a fairly modest 10 times earnings before interest, taxes, depreciation, and amortization (EBITDA)

During the company's recent Q3 earnings conference call on Nov. 5, Hostess CEO Andy Callahan noted 18.5% year-over-year net revenue growth for the quarter. He said Hostess is outperforming its sector in some areas, such as 8.7% growth in convenience food sales compared with 1% growth in general for the convenience food category. He also noted repeat buyer growth, including among younger purchasers, indicating that customers are "continuing to demonstrate their preference and loyalty for Hostess products." 

Since the Voortman acquisition is also turning profitable ahead of schedule with $26.8 million net revenue already generated, Callahan remarked that stock buybacks might be possible, though the company is also watching for opportunistic acquisition chances -- wild cards that could add value, like Voortman, or potentially disrupt Evercore's predictions.

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