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On Monday, Morgan Stanley (NYSE:MS) began coverage on BellRing Brands (NYSE:BRBR), assigning an overweight rating and setting a price target of $84.00. The firm joins a strong bullish consensus, with InvestingPro data showing 13 analysts recently revising earnings estimates upward. The firm’s analysis suggests that BellRing Brands is poised for substantial top-line growth through fiscal year 2029, propelled by its involvement in the promising convenient nutrition sector. The growth is expected to be supported by increased innovation, marketing efforts, and the benefits of additional capacity.
BellRing Brands is seen to have a significant opportunity to expand its shelf space, which, according to Morgan Stanley, could lead to meaningful growth. This view is supported by the company’s impressive 21% revenue growth over the last twelve months and a strong five-year revenue CAGR of 18%. The recent decline in the company’s stock price, combined with accelerating scanner data, is viewed as an opportune moment for investors, with the potential for approximately 20% upside to the firm’s $84 price target.
The analyst from Morgan Stanley highlighted the favorable ratio of potential rewards to risks, citing a 2:1 bull-to-bear skew. This optimistic outlook is based on the company’s strategic position within a desirable market segment and its ability to leverage market trends to drive growth.
The overweight rating suggests that Morgan Stanley believes BellRing Brands’ stock will outperform the average total return of the stocks covered by the analyst in the sector over the next 12 to 18 months. The price target of $84.00 represents a significant increase from the current trading level, indicating confidence in the company’s future performance.
Investors may find the timing advantageous to consider BellRing Brands, as the analysis by Morgan Stanley indicates a robust growth trajectory coupled with a favorable market entry point. For deeper insights into BellRing Brands’ valuation and growth metrics, InvestingPro subscribers can access comprehensive analysis, including 10 additional ProTips and detailed financial health indicators in the Pro Research Report.
In other recent news, BellRing Brands has announced a new share repurchase program, authorizing the buyback of up to $300 million of its common stock over the next two years. This follows a previous repurchase initiative where the company bought back 2.1 million shares for $151.7 million. Analysts have been actively revising their outlooks on BellRing Brands, with Mizuho (NYSE:MFG) Securities raising the stock’s price target to $85, maintaining an Outperform rating, due to strong first-quarter earnings and expectations of continued demand growth. Similarly, Stifel increased its price target to $83, highlighting a 24% rise in first-quarter revenue and a significant EBITDA increase, leading to an improved full-year forecast. Jefferies, on the other hand, reduced its price target to $86 but retained a Buy rating, citing strong demand drivers despite anticipated slower growth in the latter half of the year.
DA Davidson kept a Neutral rating with a $90 target, acknowledging BellRing Brands’ robust start to fiscal year 2025 but expressing caution over future gains due to valuation concerns. The company has seen impressive growth in its Premier shakes and Dymatize sales, contributing to the positive outlook from analysts. The adjustments in price targets and ratings reflect the varied perspectives on BellRing Brands’ financial performance and future prospects. These developments underscore the company’s strong market presence and the ongoing interest from investment analysts.
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