Prestige Brands Holdings Inc. (NYSE: PBH) Price Target Raised to $95 by DA Davidson in Best-of-Breed Bison Initiative
In a recent development, Prestige Brands Holdings Inc. (NYSE: PBH) has seen its price target increased to $95 from $93 by DA Davidson, while maintaining a Buy rating. The company has been included in DA Davidson's Best-of-Breed Bison initiative, which highlights companies with long-term, superior performance and sustainable competitive advantages.
Prestige Brands surpasses the initiative's criteria by meeting 10 out of 12 specific requirements. Notably, the company boasts the highest EBITDA margin at 34.5% and the highest free cash flow margin at 22.5%. Additionally, Prestige Brands maintains a leverage ratio of 2.8x.
DA Davidson highlights Prestige Brands' ability to generate predictable and recession-resistant free cash flow, projecting approximately $1 billion in free cash flow over the next four years. This financial strength is expected to provide the company with various options for capital allocation.
The increase in the price target to $95 is supported by an updated discounted cash flow (DCF) valuation, indicating a 31% upside to the intrinsic value of Prestige Brands.
In other news, Prestige Consumer Healthcare Inc. reported strong first-quarter fiscal 2025 results, exceeding sales and earnings expectations despite challenges in revenue and supply chain issues. The company remains focused on reducing debt, repurchasing shares, and driving growth in key brands like Hydralyte and Summers Eve.
Looking ahead, Prestige Consumer Healthcare expects full-year revenue between $1.125 billion and $1.140 billion, with adjusted EPS of $4.40 to $4.46 and a free cash flow projection of $240 million or more.
InvestingPro Insights:
- Market capitalization: $3.6 billion
- P/E ratio: 17.63
- Revenue growth decline: 1.49%
- Gross profit margin: 56.09%
- Shareholder yield: high
- Price volatility: low
- Profitability: predicted for this year and the last twelve months
InvestingPro Tips suggest that Prestige Brands is near its 52-week high, trading with stability and potential profitability. While the company does not pay a dividend, its liquid assets exceed short-term obligations, indicating financial flexibility.
For more in-depth analysis and investment opportunities, visit InvestingPro for valuable insights on Prestige Brands.
In conclusion, Prestige Brands Holdings Inc. shows strong financial performance, growth potential, and stability in the market. Investors may consider this company for long-term investment strategies, given its positive outlook and consistent track record of performance.