Prestige Brands stock price target lowered to $100 at Canaccord on eye care supply issues

Investing.com - Canaccord Genuity lowered its price target on Prestige Brands (NYSE:PBH) to $100.00 from $105.00 on Friday, while maintaining a Buy rating following the company’s first-quarter fiscal 2026 results. According to InvestingPro data, the stock has fallen over 8% in the past week, with technical indicators suggesting oversold conditions.

The consumer healthcare company reported a 6.6% year-over-year sales decline to $249.5 million for the quarter ended June, missing both Canaccord’s estimate of $258.8 million and the company’s own guidance range of $258-260 million. Adjusted earnings per share came in at $0.95, below estimates of $1.00. Despite recent challenges, InvestingPro analysis shows strong financial health with a current ratio of 4.2x, indicating robust liquidity.

Prestige Brands attributed the underperformance primarily to Clear Eyes supply constraints, which resulted in lower-than-expected shipments. North American sales fell 8.4% due to these eye care business challenges, while the international segment grew 7.1%.

Management has lowered its fiscal 2026 guidance in response to the ongoing eye care supply issues. The company still expects EBITDA margins in the low-to-mid 30% range and free cash flow of at least $245 million.

Canaccord noted that with shares down approximately 9% following the earnings report, Prestige Brands now trades at 14.6 times next year’s earnings estimates, compared to large-cap peers in the mid-20x range, representing what the firm calls "an excellent opportunity" in a "high-quality, high-margin, staple-like name with solid FCF."

In other recent news, Prestige Consumer Healthcare Inc. has announced a voluntary recall of five lots of its Little Remedies Honey Cough Syrup. The recall is due to contamination with Bacillus cereus and issues with shelf stability, affecting products distributed nationwide between December 2022 and June 2025. The specific lot numbers involved are 0039, 0545, 0640, 0450, and 1198. In another development, Jefferies has raised the price target for Prestige Brands to $85 while maintaining a Hold rating on the stock. The analysts at Jefferies attribute this adjustment to the company’s robust performance and adherence to its guidance, supported by a diversified portfolio in defensive categories. They highlighted the company’s ability to deliver consistent results despite uncertain consumer visibility and macroeconomic pressures. Jefferies also pointed out potential future upsides from strategic deals or increased capital returns. These recent developments provide investors with insights into the company’s current challenges and ongoing strategies.

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