Bullboard - Stock Discussion Forum Premium Brands Holdings Corp T.PBH.DB.G

Primary Symbol: T.PBH Alternate Symbol(s): PRBZF | T.PBH.DB.H | T.PBH.DB.I

Premium Brands Holdings Corporation is a Canada-based company, which owns a range of specialty food manufacturing and differentiated food distribution businesses with operations across Canada and the United States. The Company operates through two segments: Specialty Foods and Premium Food Distribution. The Specialty Foods segment consists of its specialty food manufacturing businesses. The... see more

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TSX:PBH - Post Discussion

Premium Brands Holdings Corp > TD

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Post by retiredcf on Jan 21, 2022 8:55am

TD

Have a $160.00 target. GLTA

Premium Brands Holding Corp.

(PBH-T) C$121.00

Q4/21 Preview and 2022 Outlook Event

Q4/21 results are expected to be reported on March 10. We forecast adjusted EBITDA of $106mm vs. $88mm last year. We are currently the Street-low. Consensus is at $113mm (range $106mm-$117mm). In 2022, we are forecasting a 10% increase in the quarterly dividend to $0.70 (from $0.64).
2022 outlook: We have lowered our 2022 EBITDA forecast by 5% as we attempt to, despite little visibility, fine-tune our assumptions around incremental supply- chain costs in H1/22. We are forecasting double-digit EBITDA growth to resume in H2/22 assuming that supply-chain pressure will start easing.

Impact: NEUTRAL

Main industry factors: 1) Elevated costs to persist in H1/22, given the ongoing supply-chain bottlenecks, high freight costs, and labour challenges; 2) Lingering pandemic risk poses a threat (i.e., increased absenteeism) to an already fragile supply chain; and 3) B.C. floods likely to affect Q4/21 results, but we expect a more muted impact on Q1/22 results.

Main company-specific factors: In 2022, we expect a tale of two halves starting with the ongoing pressure highlighted above, before giving way to the resumption of double-digit EBITDA growth, driven by: 1) PBH leveraging its sandwich capacity into more contract wins, given the rebound in consumer demand and the tight labour market faced by QSR/retail customers; 2) New program launches across its portfolio and expansions in the U.S.; 3) Production efficiencies from higher volume, facility expansions, and increased automation; and 4) Potential acquisitions (~15 files that would contribute ~$1.4bln to the top-line are in advanced/active stages); and 5) Selling price increases (i.e., ~+13%/+7% in SF/PFD) should start offsetting cost pressure, albeit more materially starting in H2/22.

Share-price catalysts: We believe that PBH's stock could benefit from major QSR/retailer contract wins, continued expansion of its growth initiatives, bigger synergy capture (i.e., value-added cross-selling) from the Clearwater acquisition, and potential M&A.

TD Investment Conclusion

In our view, there are very few CPG companies in North America with a better organic revenue growth outlook and/or M&A opportunities than PBH. Consequently, we still see sufficient upside to continue recommending to investors to buy PBH shares.