Premium Brands (PBH) AI Stock Analysis

• Market Cap: C$3.51B
• Dividend Yield: 4.35%
• Average Volume (3M): 115.13K
• Price to Earnings (P/E): 28.6
• Beta (1Y): 0.73
• Revenue Growth: 3.35%
• EPS Growth: 28.80%
• Country: CA
• Employees: 11,524
• Sector: Consumer Defensive
• Sector Strength: 73
• Industry: Packaged Foods
• EPS (TTM): 2.73
• Shares Outstanding: 44,902,073
• 10 Day Avg. Volume: 188,820
• 30 Day Avg. Volume: 115,125
• PEG Ratio: 0.99
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.55
• Price to Cash Flow (P/CF): 8.50
• P/FCF Ratio: 6.50
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: C$103.80
• Price Target Upside: 32.86% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 10

Premium Brands demonstrates strong revenue growth and strategic initiatives, particularly in the U.S., which boosts its outlook. However, challenges in operating profitability, high financial leverage, and a premium valuation pose risks. Positive earnings call sentiment and strong liquidity position contribute to a balanced overall score.

Positive Factors

Acquisition Growth

The company has a long runway for acquisition growth, indicating potential for expansion and increased market presence.

Consumer Trends

The company is well-positioned to benefit from long-term and emerging consumer trends, which are expected to provide support for organic growth across Premium Brands' businesses.

Financial Flexibility

Premium Brands completed a $150 million convertible debenture offering, which increases financial flexibility.

Negative Factors

Customer Onboarding Delays

Customer onboarding delays have pushed some growth into the following year, suggesting potential short-term challenges.

Sales Challenges

Sales challenges at a major QSR customer drove the 3Q EBITDA miss while the new sales pipeline remains strong.

Tariff Risks

Tariff noise introduces some near-term risk with significant topline sales exposure.

Premium Brands Business Overview & Revenue Model

Company Description

Premium Brands Holdings Corporation, through its subsidiaries, manufactures and distributes food products primarily in Canada and the United States. It operates in two segments, Specialty Foods and Premium Food Distribution. The company provides meat products and snacks, deli products, beef jerky and halal, sandwiches, pastries, specialty and gourmet products, salads and kettle products, entrees, panini, wraps, subs, hamburgers, burgers, muffins, breads, pastas, and baking and sushi products, as well as processed meat products and ready-to-eat meals. It is also involved in the distribution of food products, including meat, seafood, and halal food products; operation of retail/convenience store and concessionary; and provision of food and seafood processing, and cold storage services. The company operates under the brand names of Grimm's, Freybe, Piller's, Black Kassel, MarcAngelo, Oberto, Bavarian Meats, McSweeney's, Cattleman's Cut, Harvest Meats, Hempler's, Pacific Gold Country, Prime Meats, Isernio's, Fletcher's (U.S.), Leadbetters, Mclean Meats, Shahir, Expresco, Fresh Additions, Lou's Kitchen, WestEnd, Cobblestone, Yorkshire Valley Farms, Premier Meats, Black River Angus, La Maison Du Gibier, Belmont Meats, Purely Crafted, Cowboy, Connie's Kitchen, Skoulakis, Premier Healthy Living, Raybern's, Hygaard, Quality Fast Foods, Buddy's, Bread Garden Go, Stovers Kitchen, Deli Chef, Leonetti's, Island City, Stuyver's, La Boulangerie, Vero Vero, Alive & Rise, Partners, Audrey's, Duso's, Gourmet Chef, Smart Soup, Clearwater, Hancock Gourmet, Diana's Seafood, Marco Polo, Seafood Lover, Ready Brothers, Cold Cracked Lobster, Maximum Seafood, Rocky Point. It serves chains and large format retailers, independent and specialty retailers, foodservice operators, foodservice distributors, and other food manufacturers and food brokers. The company was founded in 1917 and is headquartered in Richmond, Canada.

How the Company Makes Money

Premium Brands makes money primarily through the manufacturing and distribution of specialty food products. The company's revenue streams include the sale of ready-to-eat products, fresh and processed meats, and premium specialty foods to a diverse customer base. Key revenue sources are its specialty food manufacturing, which involves producing high-quality, branded food products, and its food distribution business, which delivers these products to retailers, foodservice operators, and other customers. The company benefits from strategic partnerships with retailers and foodservice operators, as well as acquisitions of complementary businesses that expand its market reach and product offerings. Additionally, Premium Brands emphasizes innovation and brand development to drive growth and maintain a competitive edge in the specialty food market.

Premium Brands Financial Statement Overview

Summary

Premium Brands shows solid revenue growth and operational efficiency. However, the high leverage and negative free cash flow present financial risks, necessitating improvements in cash flow management and profitability.

Income Statement

Premium Brands has shown consistent revenue growth, with a notable increase from $6.02 billion in 2022 to $6.39 billion TTM. The gross profit margin for TTM stands at 17.01%, and the net profit margin is 1.55%. However, there is a slight decline in the EBITDA margin from 7.48% in 2022 to 8.49% TTM. The company maintains strong EBIT and EBITDA margins, reflecting operational efficiency. Still, the low net profit margin indicates room for improving bottom-line efficiency.

Balance Sheet

The balance sheet shows a high debt-to-equity ratio of 1.63 TTM, indicating significant leverage, which can be a risk factor. The equity ratio is moderate at 32.81%, indicating a balanced reliance on equity to finance assets. Return on equity is relatively low at 5.69% TTM, suggesting limited effectiveness in generating returns on shareholder investments.

Cash Flow

Operating cash flow decreased from $433.9 million in 2023 to $338.6 million TTM. The free cash flow is negative at -$77.5 million TTM, indicating challenges in maintaining liquidity. The operating cash flow to net income ratio is 3.41 TTM, suggesting strong cash generation relative to net income, but the negative free cash flow highlights potential cash management issues.

Breakdown
TTM	Dec 2023	Dec 2022	Dec 2021	Dec 2020	Dec 2019
Income Statement		Total Revenue
6.39B	6.26B	6.03B	4.93B	4.07B	3.65B
	Gross Profit
1.09B	1.05B	1.10B	901.90M	780.20M	725.30M
	EBIT
346.40M	338.20M	322.00M	285.90M	189.40M	194.70M
	EBITDA
542.20M	468.50M	483.50M	387.30M	295.60M	288.60M
	Net Income Common Stockholders
99.20M	94.20M	160.10M	132.70M	83.70M	84.20M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
19.40M	27.60M	11.40M	16.50M	363.00M	18.40M
	Total Assets
2.45B	5.16B	5.08B	4.41B	3.54B	2.94B
	Total Debt
1.13B	2.63B	2.56B	1.94B	1.33B	1.33B
	Net Debt
1.11B	2.61B	2.55B	1.92B	966.70M	1.32B
	Total Liabilities
1.63B	3.39B	3.27B	2.63B	1.94B	1.87B
	Stockholders Equity
823.90M	1.77B	1.81B	1.77B	1.60B	1.07B
Cash Flow		Free Cash Flow
-77.50M	34.20M	-131.90M	-76.90M	134.70M	76.30M
	Operating Cash Flow
338.60M	433.90M	96.50M	66.30M	227.30M	164.20M
	Investing Cash Flow
-323.30M	-299.20M	-343.60M	-808.90M	-242.90M	-185.70M
	Financing Cash Flow
-46.80M	-118.50M	242.00M	396.10M	360.20M	20.50M

Premium Brands Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 78.13
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:PBH, the sentiment is Negative. The current price of 78.13 is above the 20-day moving average (MA) of 78.10, above the 50-day MA of 77.93, and below the 200-day MA of 84.05, indicating a neutral trend. The MACD of 0.31 indicates Negative momentum. The RSI at 49.91 is Neutral, neither overbought nor oversold. The STOCH value of 41.16 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:PBH.

Premium Brands Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MRU	80 Outperform	C$21.54B	22.75	13.78%	1.41%	1.59%	-1.98%
ATD	77 Outperform	C$66.16B	18.58	18.66%	1.03%	11.62%	-8.08%
NWC	69 Neutral	C$2.35B	17.94	18.50%	3.22%	3.28%	1.42%
PBH	68 Neutral	C$3.51B	28.55	6.86%	4.35%	3.35%	28.80%
Sector *	63 Neutral	$20.68B	14.36	-12.41%	3.14%	1.24%	2.53%
SAP	56 Neutral	C$10.35B	42.30	-2.28%	3.05%	9.20%	-147.37%

Premium Brands Corporate Events

Premium Brands Closes Additional $22.5 Million Debenture Offering

Premium Brands Holdings Corporation announced the successful closing of an additional $22.5 million in convertible unsecured subordinated debentures, following the exercise of an over-allotment option by a syndicate of underwriters. This brings the total issuance to $172.5 million, which will be used to temporarily reduce existing indebtedness and increase available credit for further financial obligations, potentially impacting the company’s financial flexibility and market positioning.

Premium Brands Reports Record Q4 Sales and Strategic Acquisition

Premium Brands Holdings Corporation reported record fourth quarter sales and adjusted EBITDA for 2024, with revenue reaching $1.64 billion, a 5.4% increase from the previous year. The company also announced the acquisition of Denmark Sausage, LLC, and declared a first quarter dividend of $0.85 per share for 2025. The strong performance was driven by significant growth in the U.S. market, particularly in protein and baked goods, although challenges persisted in the foodservice channel. The company remains optimistic about overcoming these challenges and continuing its growth trajectory.

Premium Brands Expands Financial Flexibility with Over-Allotment Option

Premium Brands Holdings Corporation announced the exercise of the over-allotment option related to its recent $150 million public offering of 5.50% convertible unsecured subordinated debentures. The additional $22.5 million raised will be used to temporarily reduce existing indebtedness under its revolving credit facility, thereby increasing available funds to partially pay off 4.65% convertible unsecured debentures due in April 2025. This move is expected to enhance the company’s financial flexibility and support its strategic financial management.

Premium Brands Completes $150 Million Debenture Offering to Enhance Liquidity

Premium Brands Holdings Corporation has successfully completed a $150 million public offering of 5.50% convertible unsecured subordinated debentures. The proceeds from this offering will be used to reduce existing indebtedness, thereby increasing available credit to fund the payout of its 4.65% debentures due in April 2025. This financial maneuver is expected to enhance the company’s liquidity and operational flexibility, potentially impacting its market positioning positively.

Premium Brands Files Prospectus for $150 Million Debenture Offering

Premium Brands Holdings Corporation has announced the filing of a final short form prospectus for a $150 million financing of convertible unsecured subordinated debentures. This financing, co-led by major financial institutions, includes an over-allotment option that could increase total proceeds to $172.5 million, potentially impacting the company’s financial flexibility and market positioning.

Premium Brands to Announce Q4 2024 Financial Results

Premium Brands Holdings Corporation is set to release its fourth quarter 2024 financial results on March 21, 2025. The release will include management’s pre-recorded remarks, financial statements, and an investor presentation, all available on the company’s website. Additionally, a live question and answer session will be hosted by the company’s President and CEO, George Paleologou, and CFO, Will Kalutycz, providing stakeholders with an opportunity to engage directly with the company’s leadership.

Premium Brands Secures $150 Million in Convertible Debenture Financing

Premium Brands Holdings Corporation has announced a $150 million financing deal through the issuance of convertible unsecured subordinated debentures. The proceeds will be used to repay existing debt, fund future acquisitions, and support capital projects, enhancing the company’s financial flexibility and strategic growth opportunities.

Premium Brands Expands with New Acquisitions

Premium Brands Holdings Corporation has expanded its portfolio by acquiring three specialty food manufacturers: NSP Quality Meats, Casa Di Bertacchi, and Italia Salami, expecting these transactions to boost its 2025 earnings. Additionally, the company has generated significant funds through the sale and leaseback of its Washington deli meats facility.