On Thursday, Telsey Advisory Group maintained its Market Perform rating on Sovos Brands Inc (NASDAQ:SOVO), with a steady price target of $23.00. The firm predicts that Sovos will increase its profitable market share in the year 2024 and the years to follow.
The valuation of Sovos Brands is currently seen as stable, primarily influenced by the proposed merger with Campbell Soup (NYSE:CPB), which is reflected in the acquisition price of $23 per share.
The price target set by Telsey is based on an enterprise value to earnings before interest, taxes, depreciation, and amortization (EV/EBITDA) multiple of approximately 16 times. This calculation is tied to the firm's new forecast for Sovos Brands' fiscal year 2024 EBITDA, which is estimated to reach $170 million.
The analyst's commentary highlighted the potential growth for Sovos in the near future, but also emphasized that the current valuation is anchored by the merger specifics with Campbell Soup. This implies that any significant changes in the stock's valuation are likely contingent on the developments and finalization of the merger agreement.
Sovos Brands, known for its portfolio of food brands, has been under scrutiny as it navigates through the merger process. The anticipated gain in profitable market share is a positive note for the company's operational outlook.
The Telsey Advisory Group's reiterated rating and price target suggest a watchful approach to Sovos Brands' performance, as the market awaits further details on the merger's progress and its impact on the company's financials.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.