Stifel Reducing his valuation multiple based on the market backdrop but emphasizing “substantial potential upside” remains, Stifel’s Justin Keywood cut his target for Jamieson Wellness Inc. to $45 from $50 with a “buy” recommendation. The average on the Street is $41.10.
“We called 20+ customers in North America, where vitamin demand was said to be steady vs. last year with no recent change in pricing and expectations of strength over the upcoming flu season. youtheory was also unanimously mentioned as a strong brand, including at Costco U.S. stores with formulary advantages for Collagen,” he said. “As we translate the feedback into our forecasts, we see a moderation of our near-term estimates but still in-line with guidance, highlighting good growth and an opportunity. We also expect margins to expand next year (up 150 basis points) and could see JWEL further expanding into the U.S. (#1 VMS market) with additional M&A in the medium-term. JWEL’s stock has been under pressure, down (28 per cent) year-to-date (S&P/TSX, up 4 per cent) and valuation now at a historic low of 10 times forward EBITDA.”