DAVY VIEW

Glanbia shares are down close to 20% from their recent peak despite modest consensus revisions. Equity debates centre on the 2025 margin for its branded platform and top-line development, including pricing power. We believe the growth runway for Optimum Nutrition (ON) is intact, underpinned by the broadening adoption of high protein, as evidenced by distribution gains and scale attributes. Our FY24 diluted adjusted EPS forecast is largely unchanged (137.6c) with FY25 lowered by 1.5% to 146.54c. Recent price dislocation has the equity trading on a FY25 P/E of 11.9x and a free cash flow yield of 7.5%. In the context of ongoing operating progress and balance sheet flexibility, the equity is oversold. We reiterate our price target of 2060c.