Gianni Di Poce Rings The Bell On BellRing Brands, Calls For 42% Returns

BellRing Brands Inc BRBR caught the attention of Benzinga’s internal analyst Gianni Di Poce with its recent breakout from a descending triangle formation and subsequent new all-time highs.

The BRBR Analyst: Di Poce said in his weekly Benzinga Pro Insider Report that he is bullish on BellRing, citing its record-breaking year in 2022 when it generated $1.37 billion in revenue and $82.3 million in earnings.

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For the uninitiated, BellRing produces various nutrition products including protein shakes and snack bars. The company focuses on developing and marketing convenient, high-quality and affordable nutrition products that cater to the changing lifestyles and needs of consumers.

BellRing Brands operates independently after being spun off by Post Holdings Inc POST, which no longer owns any shares in the company.

Di Poce said that despite the strong performance seen on the stock, valuation metrics in BellRing are on the steep side, with a P/E ratio of 31.92, a price-to-sales ratio of 2.63, and an EV to EBITDA ratio of 21.45.

From a charting perspective, the stock's breakout is a highly bullish signal, and the company's unique contract manufacturing network, which requires minimal investment on its end, protects its profit margins.

The recent increase in sales, driven primarily by its Premier Protein line of shakes, further reinforces the company's strong position in the market.

Further, the Benzinga analyst said the lack of insider selling and insider buying from its directors is a positive sign from management. BellRing has a solid free quarterly cash flow of $64.9 million, and other analyst ratings are optimistic, with Truist Securities, Morgan Stanley and Goldman Sachs issuing a Buy rating on the stock.

Di Poce sees the stock moving 42% higher from current levels and set a $42 to $44 price target.
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