BellRing Brands Poised For Growth: Analyst Sees Supply Boost And Volume Gains Fueling 1H24 Performance

Needham analyst Matt McGinley reiterated a Buy rating on the shares of BellRing Brands, Inc. BRBR, raising the target price to $44 from $40.
The analyst expects increased Premier production capacity for BellRing Brands, placing the company in a better supply position.
Matt notes that these distribution gains, combined with more normal brand support levels, will likely provide substantial volume gains through 1H24.
While pricing will likely not be a factor in FY24 topline growth, volume gains enabled by capacity increases will likely provide for FY24 growth at or above the expected 10-12% long-term growth rate.
Based on the analyst's bull case assumptions, FY23 sales are expected to grow 20%+ to $1.675 billion and EBITDA is expected to reach $345 million or a ~21% margin.
The company expects the EBITDA rate in FY23 will likely be near the top of the 18-20% long-term rate.
Waning commodity prices will likely provide a cushion for higher promotion and ad spending without significant risk of margin degradation.
Price Action: BRBR is trading higher by 0.92% to $36.36 in the market session on the last check Wednesday.

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