TD Raises Target Consistent, Defensive Growth Not Reflected In
The Multiple: Top Small Cap Pick
THE TD COWEN INSIGHT
JWEL shares are up 10% YTD, although we still feel that the shares are undervalued given the
company's earnings consistency. This is driven by benefits stemming from the resiliency of
consumer health spending. JWEL recorded another solid year, and we expect this success
to continue in 2026 across all of its segments. We are raising our TP to $48 (from $46). JWEL remains our top small cap pick.
Impact: SLIGHTLY POSITIVE
This was another quality quarterly result, driven by healthy consumption growth across geographies, channels, and brands:
Canada: Strong MSD% y/y dollar and POS growth driven by quality-focused marketing campaigns and innovation.
youtheory: 20% y/y revenue growth (ahead of our forecast) due to the continued success of both e-commerce and traditional channels.
China: A 44% sales increase (19% higher than our estimate) due to (even greater) brand awareness and growing share in the club/retail channels, among other factors.
International: 39% increase owing to strong consumption and organic growth in key markets (inc. the Middle East).
We adjusted our model for Q4 results and management's 2026 guide (see Fig. 2 and 3 for details). We'd highlight that flat EBITDA margin expectations for the Jamieson Brands
segment are owing to continued category strength across it geographic markets, albeit skewed towards China as it continues to experience "supercharged" growth (i.e. lower margin business). All other changes reflect fine-tuning.
We are raising our TP to $48 (up from $46) after rolling out valuation another quarter.
Looking out further, we are confident that given its platform and innovation pipeline, JWEL
is well-positioned to move towards a $1bln top line on the back of consistent double-digit
revenue and EBITDA growth. Despite all of this, including another solid quarter and annual
performance, shares are trading at just 10.8x forward consensus EBITDA. This is still below
JWEL's 2-year historical average of 11.2x and well below the ~15.8x at which Blackmores was
acquired just a few years ago.