Q: Hi Guys
Premium Brands is almost $20 below where it has traded not too long ago. Is there light in the tunnel in 2025? Are there any positive signs that earnings and momentum might move this stock much higher in 2025 or is much more patience required?
Much thanks
Stuart
Premium Brands is almost $20 below where it has traded not too long ago. Is there light in the tunnel in 2025? Are there any positive signs that earnings and momentum might move this stock much higher in 2025 or is much more patience required?
Much thanks
Stuart
5i Research Answer:
PBH has been on an investment cycle to expand production capacity in recent years, which has ramped up its capital investments meaningfully. That being said, the company has shown some early signs of a complete investment cycle and could be poised to reaccelerate growth in the near term. We think investors need some patience with PBH. A few catalysts that could make PBH interesting again include:
_Capital expenditures come down
_Organic growth accelerates
_Free cash flow recovers
We think a combination of these factors could lead to a significant multiple re-rate in share price.