Prestige Consumer Healthcare Inc. (PBH): A Bull Case Theory 

We came across a bullish thesis on Prestige Consumer Healthcare Inc. on CopyCat Invest’s Substack. In this article, we will summarize the bulls’ thesis on PBH. Prestige Consumer Healthcare Inc.’s share was trading at $63.90 as of January 29th. PBH’s trailing and forward P/E were 15.63 and 13.02 respectively according to Yahoo Finance.

Prestige Consumer Healthcare Inc., together with its subsidiaries, develops, manufactures, markets, distributes, and sells over the counter (OTC) health and personal care products in North America, Australia, and internationally. (PBH) has reemerged as a compelling investment following the recent announcement of its acquisition of U.S.-based Stampede Culinary Partners for US $662.5 million, a multiple of 9.7x estimated FY25 EBITDA. The deal, expected to close by January 2026, is structured with US $512.5 million in cash, US $150 million in stock (~5% dilution), and an additional US $100 million earn-out over two fiscal years.

The acquisition is projected to contribute approximately 15% of PBH’s EBITDA, with management anticipating mid-single-digit EPS accretion initially, rising to high-single-digit accretion after realizing operational efficiencies, effectively reducing the multiple to 7.5x. PBH’s growth has historically been driven by a combination of acquisitions and organic expansion, positioning it as a specialty food producer and distributor in Canada and the U.S.

Despite choppy performance in recent years, PBH’s earnings run-rate has grown significantly since 2017, yet the stock trades near mid-2017 levels. Current-year EPS valuation sits around 21x, while next year’s estimates, reflecting 39% EPS growth and continued double-digit growth thereafter, imply a multiple closer to 15x.

With a dividend yield above 3% and a strong growth trajectory underpinned by strategic acquisitions like Stampede, PBH presents an attractive risk/reward opportunity. Execution remains a key factor, but if management successfully integrates Stampede and leverages operational efficiencies, PBH could unlock meaningful shareholder value while continuing to expand its presence in North America’s specialty food sector, combining cash flow stability with significant upside potential.

Previously we covered a bullish thesis on Colgate-Palmolive Company (CL) by Kontra in October 2024, which highlighted the company’s strong global presence, focus on premiumization, and consistent pricing power, positioning it as a quality compounder. The stock has depreciated approximately by 15.15% since our coverage. The thesis still stands as CL continues to benefit from durable demand. CopyCat Invest shares a similar perspective but emphasizes PBH’s growth through strategic acquisitions and organic expansion.

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Disclosure: None.