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On Monday, BMO Capital Markets enhanced its outlook for Premium Brands Holdings Corp . (TSX:PBH:CN) (OTC: PRBZF), increasing the price target to Cdn$100.00, up from the previous Cdn$94.00, while maintaining an Outperform rating. The adjustment follows the company’s fourth-quarter results, which met expectations, and positive projections for upcoming product launches in the United States.
Stephen MacLeod, an analyst at BMO Capital, noted that Premium Brands’ fourth-quarter performance was consistent with both their estimates and the consensus. The company’s core sales growth initiatives in the U.S. continued to progress in the fourth quarter. Despite challenges from a key sandwich customer, which impacted sales growth by 9.5%, the overall growth is expected to pick up pace with significant U.S. product launches planned for late second quarter and early third quarter.
The analyst also mentioned that while Premium Brands is exposed to tariffs to the tune of approximately $500-600 million, the risk is manageable due to the company’s cross-border manufacturing capabilities. However, it was highlighted that the anticipated increase in the fourth-quarter dividend was deferred, pending further clarity on trade matters.
BMO Capital sees an attractive risk/reward scenario for Premium Brands, citing a 9.3x 2026E EV/EBITDA. The firm anticipates that the sales acceleration expected in 2025 will have a positive impact on the stock. This projection aligns with the company’s strategic growth initiatives and the planned product launches, which are set to enhance its presence in the U.S. market.
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