Jefferies lowered its price target for BellRing Brands (NYSE:BRBR) to $38.00 from $49.00 on Wednesday, while keeping a Buy rating on the shares. The revised target implies meaningful upside from the current share price of $20.88, which remains far below the 52-week peak of $79.57. Data from InvestingPro indicates the stock's Relative Strength Index is in oversold territory.
The broker pointed to two central pressures on the business: heightened competitive intensity in the ready-to-drink (RTD) shake segment and increasing input costs. Jefferies described the RTD shake category as still among the fastest-growing segments in consumer packaged goods, but stressed that competition and cost dynamics have become more challenging for incumbents.
Jefferies also highlighted the company's outlook for 2026, calling the year "shaping up as a high-stakes, more promotional year that is 2H weighted." The firm noted additional uncertainty tied to an impending CEO transition at BellRing Brands, which it sees as a factor that could complicate execution during an already promotional period.
Despite flagging these near-term headwinds, Jefferies continued to characterize investor fears as "overdone" and retained a constructive stance on the stock. The research team pointed to valuation as a supporting element of its thesis, saying shares trade at about 8 times FY3 price-to-earnings and present an "attractive risk-reward for one of the best secular trends in Staples."
Operational results published earlier also paint a mixed picture. BellRing Brands reported first-quarter 2025 earnings that exceeded consensus: earnings per share of $0.37 compared with a forecast of $0.3178, and revenue of $537.0 million against an expected $505.55 million. Nevertheless, the company trimmed its fiscal 2026 guidance, attributing the revision to increased promotional activity in the shake category and higher whey costs.
Those announcements prompted a range of responses across other sell-side firms. TD Cowen cut its price target to $24 and maintained a Hold rating. Stifel lowered its target to $34 from $50 but kept a Buy rating, noting that stronger-than-expected first-quarter results were influenced by favorable shipment timing. William Blair reiterated an Outperform view, pointing to solid category growth and the strength of the Premier Protein brand, while also acknowledging offsets from timing effects, competitive promotions and cost pressures.
Taken together, these developments highlight both the opportunities presented by the RTD shake category and the tangible near-term risks that come with intensified promotional activity and rising input costs. For investors, valuation and the company's ability to navigate promotional dynamics and a leadership change are likely to be central considerations as 2026 approaches.
Summary
Jefferies reduced BellRing Brands' price target to $38 but kept a Buy rating, citing competitive and cost pressures in the RTD shake market. BellRing beat Q1 2025 expectations on EPS and revenue but lowered fiscal 2026 guidance due to more promotional activity and higher whey costs. Other analysts responded with mixed changes to price targets and ratings.
Key points
- Jefferies cut its price target to $38 from $49 while maintaining a Buy rating; current price is $20.88 and 52-week high is $79.57.
- RTD shake category faces increasing competition and rising input costs, prompting a downgraded outlook for fiscal 2026 from management.
- Q1 2025 results beat estimates - EPS $0.37 vs. $0.3178 forecast and revenue $537 million vs. $505.55 million expected - but guidance was lowered.
Risks and uncertainties
- Heightened promotional activity in the RTD shake category could pressure margins and volumes - this affects the consumer staples and food & beverage sectors.
- Rising input costs, specifically higher whey costs, may erode profitability if not offset by pricing or mix improvements - a cost-pressure risk for packaged food companies.
- Management transition with an upcoming CEO change introduces execution uncertainty during a period the firm describes as 2H weighted and promotional - governance and strategic risks for investors.