Premium Brands: Still Trading Above Its Peers

2025-05-26 00:44:40 ET

Summary

• Q1 results surprised with strong 5.9% organic growth, driven by US acquisitions and robust specialty foods performance, but margins remain under pressure.
• Despite revenue acceleration, net income fell 58% year-over-year due to rising commodity costs, integration inefficiencies, and higher interest expenses.
• Premium Brands' valuation remains above peers, with high leverage and only modest upside, making shares unattractive for new buyers at current levels.
• I reiterate my 'Hold' rating: existing shareholders can expect solid dividends, but risk/reward is not compelling enough to upgrade to 'Buy.'

In my last write-up on Premium Brands ( PBH:CA ) (PRBZF), I joked that we should grab a snack if we’re expecting rapid growth....

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