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A jug of milk is sits at the gate of the Indianapolis Motor Speedway along with other tributes left by fans to two-time Indianapolis 500 winner Dan Wheldon on October 17, 2011 in Indianapolis, Indiana.

Just a couple of years ago, Dean Foods, the U.S.' largest seller of milk, was unloved. Its high-end organics business was struggling as consumers cut back on spending. And as retailers sold gallons of milk as loss leaders, pushing down margins, Dean Foods' traditional business suffered as well. By August 2010, it was one of the five worst-performing stocks in all of the S&P 500 for the year.

Investors are no longer so sour, however. Dean Foods closed May with a 27 per cent gain for the month, making it the best performer in the S&P 500. The catalyst was a healthy beat May 10 on its quarterly earnings expectations, 31 cents per share versus a consensus of 21 cents, thanks to stabilizing prices and the company's cost-cutting.

Dean Foods' stock has now roughly doubled from its 52-week low. And while analysts see a turnaround, many also say the shares are approaching full value.

"[The] solid quarter and strong – albeit conservative – guidance signals a strong earnings recovery as we believe the worst of fresh dairy challenges is clearly behind us," says Amit Sharma of BMO Nesbitt Burns Inc.'s U.S. research arm. Mr. Sharma has an "outperform" rating and raised his target price to $16 on May 10, when the stock closed at $14.83. It ended May at $15.64.

Erin Lash of Morningstar Equity Research continued to estimate Dean Foods' "fair value" at $15 even as management raised its full-year guidance to $1.10-$1.20 of earnings per share from 87 cents to 95 cents.

"Although we believe Dean is moving in the right direction, we aren't convinced that it's out of the woods," she writes. "Consumers remain cautious, especially as food and fuel prices are still elevated, and unemployment levels remain high. As a result, we doubt that competitive pressures from retailers (which are pushing their private-label offerings to drive traffic in their stores) and competitors (which are taking aggressive pricing actions) have yet to fully abate."

Others see room for some gains, however. Judy Hong of Goldman Sachs has a $17 target, up from $15 before the earnings. She sees Dean Foods gaining market share with its basic name brands, and its Whitewave organic business is "firing on all cylinders."

Alexia Howard of Bernstein Research raised her target price to $18 after the earnings beat and raised her 2012 estimate to $1.30 — above management's guidance.

And Dean Foods has one very important booster: CNBC personality Jim Cramer, who recommended the stock May 28 and then had CEO Gregg Engles on his show May 31 to celebrate the stock's status as May S&P 500 champion.

"The phenomenal performance of Dean Foods practically leaves me speechless," he said, unconvincingly. "What can I say, other than, of course, Got Milk?"

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