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Research Alert: CFRA Initiates Premium Brands With A Hold Opinion And A Target Price Of Cad88
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Research Alert: CFRA Initiates Premium Brands With A Hold Opinion And A Target Price Of Cad88
Jul 7, 2025 9:02 AM

11:40 AM EDT, 07/07/2025 (MT Newswires) -- CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:

We begin PBH at Hold.Our 12-month price target of CAD88 comes from an earnings multiple of 15x our FY 26 adjusted earnings per share of CAD5.89.We believe PBH can continue to achieve 6%-8% organic growth, with 1%-2% inorganic growth tacked on. Near-term gross margin and operating margins have expanded modestly and we maintain this trend in our model. However, it remains to be seen if we are at an inflection point in the margin story. Interest expenses are 3.5x the FY 21 total, driving adjusted net income margins lower each year. Relative to peers, PBH has historically traded exactly in line with the group (on a forward earnings basis). Currently, it trades at 2.7 turns lower than the peer group, which we believe reflects its cost of growth and higher capex spend. Currently trading at 12.2x, this is nearly 2 standard deviations below its long-term average of 19x. This valuation could be opportunistic should the margin story reach an inflection point.

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