What Happened?
Shares of nutrition products company Bellring Brands (NYSE: BRBR) jumped 6.5% in the afternoon session after the major indices rebounded (Nasdaq +1.5%, S&P 500 +1.0%) as reports pointed to easing tensions between Israel and Iran. The Wall Street Journal said senior Iranian officials had signaled a willingness to restart stalled nuclear talks, on the condition that Washington refrain from joining Israel's ongoing strikes. This development triggered a significant decline in oil prices, easing inflation concerns. Also, it is possible some investors were buying the dip following the sell-off at the end of the previous week.
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What The Market Is Telling Us
BellRing Brands’s shares are not very volatile and have only had 9 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 10 months ago when the stock gained 11.4% on the news that the company reported a "beat and raise" quarter. Second-quarter earnings results blew past analysts' gross margin expectations. Its organic revenue growth outperformed Wall Street's estimates, driven mainly by an 18.4% increase in volume.
The results benefited from strong demand for the Premium Protein brand as consumption growth of the product continued to accelerate during the quarter. Notably, management highlighted that "Dollar consumption of Premier Protein ready-to-drink ("RTD") shakes and Premier Protein powder products increased 9.6% and 43.6%."
Overall, Premier Protein recorded a 19.8% sales growth. Looking ahead, management raised revenue guidance for the full year to $1.96-$2.00 billion (from $1.93-$1.99 billion) and Adjusted EBITDA to $430-$440 million (from $400-$420 million), suggesting that strong product demand is expected to continue in the second half of the year. Zooming out, this was a fantastic quarter that should have shareholders cheering.
BellRing Brands is down 16.1% since the beginning of the year, and at $62.58 per share, it is trading 21.2% below its 52-week high of $79.39 from January 2025. Investors who bought $1,000 worth of BellRing Brands’s shares 5 years ago would now be looking at an investment worth $3,148.
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