Gold prices tick higher on fresh US tariff threats, Fed rate cut hopes
Investing.com - The Simply Goods Group (NASDAQ:SMPL), currently trading at $32.13 and maintaining a "GOOD" financial health score according to InvestingPro, maintained its Neutral rating from UBS, which reiterated its $36.00 price target despite the company reporting a third-quarter earnings beat.
UBS noted that SMPL has moved its fiscal year 2025 outlook to the low end of its previous guidance range, citing weaker consumer demand, elevated inflation, and tariff headwinds for the remainder of the year.
The research firm indicated that while management did not provide an official outlook for fiscal year 2026, it appears that next year will deliver below-algorithm performance on both top and bottom lines.
UBS observed that the challenging environment is somewhat reflected in SMPL’s current valuation, with shares trading at approximately 12 times the firm’s revised EBITDA forecast, representing a low-single-digit premium to packaged food peers versus its long-term average premium of 20%.
The firm recommended waiting for a more attractive entry point or greater clarity on revenue and profit trajectories for fiscal year 2026 before potentially taking a more positive stance on the stock, noting that fiscal 2026 profit growth is likely to be weighted toward the second half of the year. According to InvestingPro analysis, SMPL appears undervalued at current levels, with additional insights and detailed valuation metrics available in the comprehensive Pro Research Report.
In other recent news, The Simply Good Foods Group reported third-quarter results that surpassed analyst expectations, with EBITDA reaching $73.9 million, a 3% increase from the previous year. Despite the positive performance, the company adjusted its fiscal year 2025 guidance to the lower end of its previous range, citing challenges with its Atkins brand, which saw a 13% decline. Analysts from TD Cowen lowered their price target for Simply Good Foods to $34, maintaining a Hold rating due to a slower-than-expected start to the fourth quarter. Stifel, however, reiterated its Buy rating with a price target of $38, acknowledging the strong growth in the Quest and OWYN brands, which showed 11% and 24% growth, respectively. Morgan Stanley (NYSE:MS) also maintained its Equalweight rating, noting the solid 3% retail takeaway growth but highlighting a deceleration in OWYN’s growth from 52% in the previous quarter to 24%. DA Davidson reiterated a Neutral rating, pointing out the slight miss in net sales for the OWYN brand and a potential reduction in fiscal year 2026 outlook due to various challenges. The company has trimmed its fiscal year 2025 sales and EBITDA growth projections, now expecting 8.5% to 9.5% sales growth and 4% to 5% EBITDA growth. The fiscal year 2026 estimates are expected to be revised downward, with analysts citing factors like cost inflation and distribution losses. Despite these challenges, Simply Good Foods remains focused on expanding distribution for its Quest and OWYN brands during the upcoming fall shelf reset.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.