On Wednesday, Truist Securities updated its outlook on BellRing Brands (NYSE:BRBR), increasing the stock's price target to $75.00 from the previous $60.00, while keeping a Hold rating on the shares. The adjustment follows BellRing Brands' fiscal fourth-quarter 2024 earnings report, which was released after market close on Tuesday.
The analyst at Truist Securities has revised upward the financial forecasts for BellRing Brands for fiscal years 2025 and 2026. The new estimates for fiscal year 2025 include sales of $2.280 billion, adjusted EBITDA of $475.1 million, and adjusted earnings per share (EPS) of $2.15. These figures have been raised from the previous projections of $2.126 billion in sales, $448.5 million in adjusted EBITDA, and $2.01 in adjusted EPS.
For fiscal year 2026, the analyst's expectations are now set at sales of $2.486 billion, adjusted EBITDA of $522.8 million, and adjusted EPS of $2.49. These estimates have seen an increase from the former forecasts of $2.285 billion in sales, $488.8 million in adjusted EBITDA, and $2.25 in adjusted EPS.
The revised price target represents a notable increase from the prior target and reflects the analyst's updated financial estimates. The Hold rating indicates that while the analyst acknowledges the improved financial outlook for BellRing Brands, they do not necessarily recommend purchasing the stock at this time.
In other recent news, BellRing Brands has been the center of attention among several analysts following its robust fourth-quarter earnings and revenue results. The company reported revenue of $555.8 million, surpassing expectations, and an adjusted EBITDA of $116.5 million.
Deutsche Bank (ETR:DBKGn) raised its price target for BellRing Brands to $77, citing the company's strong fiscal year 2025 outlook, while Citi increased its target to $83, noting the strong demand for the company's shake products. Truist Securities adjusted its target to $60, and Stephens reaffirmed their Equal Weight rating.
These developments come on the back of BellRing Brands' projected net sales of $2.24-2.32 billion for fiscal year 2025, indicating a growth of 12-16%, and adjusted EBITDA estimated between $460-490 million. The company's positive outlook is supported by expectations of ample supply and a robust pipeline of new products.
Significant growth was noted in the ready-to-drink shake segment, primarily through volume increases attributed to organic growth and distribution gains. BellRing Brands also purchased 1.3 million shares for $74 million and retains a $216 million share repurchase authorization. Looking forward to fiscal year 2025, the company anticipates robust sales growth, with indications suggesting a 10-12% increase.
InvestingPro Insights
BellRing Brands (NYSE:BRBR) has been demonstrating strong financial performance, aligning with Truist Securities' upward revisions. According to InvestingPro data, the company's revenue growth stands at an impressive 19.76% for the last twelve months as of Q4 2024, with quarterly revenue growth at 17.6%. This robust growth trajectory supports the analyst's increased sales projections for fiscal years 2025 and 2026.
InvestingPro Tips highlight that BRBR is trading at a low P/E ratio relative to near-term earnings growth, with a PEG ratio of 0.75. This suggests that the stock may be undervalued considering its growth prospects, which could justify Truist Securities' higher price target.
The company's strong financial health is further evidenced by its operating income margin of 20.29% and an EBITDA growth of 34.11% over the last twelve months. These metrics underscore BellRing Brands' ability to convert revenue into profit effectively, supporting the analyst's optimistic EBITDA forecasts.
It's worth noting that InvestingPro offers 17 additional tips for BRBR, providing investors with a comprehensive analysis of the company's financial position and market performance.
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