RBCCurrent and upside scenario targets are $44.00 and $48.00. GLTA
March 12, 2026
Jamieson Wellness Inc.
On the Road with Jamieson Wellness
Our view: We recently hosted investor meetings with Jamieson Wellness
in Montreal. While there are no changes to our forecast, we believe our
positive investment thesis for the company remains firmly intact and view
the recent pullback in the shares as an attractive buying opportunity.
Key points:
• Management remains confident in achieving 2026 guidance. While
acknowledging the recent geopolitical developments, management
remains confident in achieving previously provided 2026 guidance,
indicating that: (i) conflict-driven port disruptions could have a minor
impact on shipments to the Middle East in Q1/26, but the business
continues to operate as usual and exposure is modest; (ii) consumption
is supported by structural health and wellness tailwinds with increasing
participation from younger consumers representing an emerging driver
of category growth; (iii) while channel shifting/switching towards value
continues to occur, management has yet to observe any brand trade-
down activity with consumption historically remaining resilient through
periods of elevated macro uncertainty; and (iv) the company continues
to take a “responsible” approach to providing China revenue growth
guidance of +20%-30% for 2026 (versus YoY growth of +56% and +78%
in 2025 and 2024, respectively).
• Underlying operating leverage overshadowed by mix. Although
consolidated adjusted EBITDA guidance incorporates stable margins at
~19.4% for 2026, the company continues to deliver positive operating
leverage across each underlying business. Specifically: (i) EBITDA margins
are expected to expand across each geography in 2026, with consolidated
margins reflecting mix including a recovery for Strategic Partners; (ii)
China EBITDA margins have crossed into double-digits (versus mid-
single digits initially) with the business well on track to reach mid-teens
in the medium-term; and (iii) longer-term, management has visibility
on China reaching a 20% EBITDA margin (excluding any benefits from
potentially manufacturing in Asia) leveraging scale as well as bringing
some remaining third-party distribution in-house.
• Ample flexibility to pursue a strategic bolt-on acquisition. At ~70%
total capacity utilization, management reiterated a 2-3 year timeline to
decide on a $50MM-$100MM manufacturing expansion that it expects
to double the company’s annual sales capacity to ~$2B. In the meantime,
with modest annual capex the company maintains ample financial
flexibility with capital allocation priorities including more active share
repurchases following the recent pullback as well as potential M&A.
On the M&A front: (i) the company maintains a disciplined approach
including a 20% after-tax IRR threshold; (ii) with a leverage ceiling of 3.5x,
larger accretive transactions could be supported through a mix of equity
and contingent considerations; and (iii) near-term focus remains on a
complementary bolt-on acquisition in the U.S. that would expand the
company’s presence (without overlapping the existing portfolio) while
digital capabilities (social commerce etc.) are also a priority.