DAVY VIEW

Glanbia has lost c.25% of its market value from its June-24 highs, largely related to a shift in earnings momentum triggered by adjustments to Branded margin expectations for FY25. The strength of demand in the high protein category and execution is manifesting itself in impressive volume growth for Optimum Nutrition and Isopure but also translating into significant upward price pressure in whey markets. Resolution of the latter needs new capacity, which is expected in late 2025. The net effect of model changes lowers our FY25 EPS forecast by c.4%. The outsized move in the share price relative to earnings puts the equity close to 10.8x with a free cash flow yield of 8% – which is a material disconnect relative to branded or ingredients peers.