Premium Brands Holdings: Desjardins Securities Upgrades Valuation on Growth Acceleration Forecast

STA Research
May 10th, 2025
Premium Brands Holdings: Scotiabank Raises Target Forecast on Strong Earnings
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Premium Brands Holdings

Desjardins Securities issued a research report on Premium Brands Holdings Corp. has raised the 12 month target price to C$98 from the previous C$93 per share. The valuation upgrade reflects optimism about the company’s future performance, driven by several positive factors.

Reasons for Target Price Increase:

  1. Reacceleration of Organic Volume Growth:

    • Desjardins expects a pickup in the company’s organic volume growth. This indicates that the company’s core businesses are likely to see increased sales without relying on acquisitions or external factors, pointing to a stronger underlying demand for its products.

  2. Margin Expansion:

    • The company is anticipated to experience improved profit margins. This could be driven by better operational efficiency, cost management, or favorable product pricing, which would enhance profitability.

  3. Reduced Leverage:

    • Lower leverage suggests that Premium Brands Holdings is likely managing its debt levels more effectively, possibly through debt repayment or improved cash flow management. Reduced financial risk can improve investor confidence and support higher stock valuations.

Stock Forecast & Analysis

According to the latest forecast from 11 analysts, the average target price for Premium Brands Holdings Corporation (PBH) is CAD 100.84 over the next 12 months.

ANALYST RATING:

The consensus  analyst rating for Premium Brands Holdings Corporation is a “Strong Buy”.

This indicates that most analysts covering the stock believe it is currently undervalued or has significant upside potential based on expected financial performance, strategic initiatives, and market conditions.

STOCK TARGET ADVISOR’S ANALYSIS:

Stock Target Advisor’s independent analysis rates the stock as Slightly Bullish.

This rating is derived from an analysis of 7 positive signals and 5 negative signals.

The Slightly Bullish stance suggests that while there are more positive than negative factors influencing the stock, some caution is still warranted.

STOCK PRICE PERFORMANCE:

The last recorded stock price for Premium Brands Holdings Corporation was CAD 82.11.

Recent Performance Metrics:

Past Week: The stock price increased by +8.40%, indicating strong short-term momentum.

Past Month: The stock price rose by +12.45%, suggesting sustained positive sentiment among investors.

Past Year: Despite recent gains, the stock is still down by -7.98% compared to the same period last year, reflecting challenges faced over the longer term.

OUTLOOK:

The overall outlook for Premium Brands Holdings Corporation appears positive, as reflected by the “Strong Buy” analyst rating and the Slightly Bullish analysis. The average target price of CAD 100.84 suggests considerable upside from the current price of CAD 82.11. The recent uptrend in stock price, driven by improving fundamentals such as organic volume growth and margin expansion, supports the expectation of a recovery. However, the negative year-over-year change indicates that some challenges remain, and investors should monitor the company’s progress in sustaining recent performance improvements.

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