What Happened?
Shares of nutrition products company Bellring Brands (NYSE: BRBR) jumped 5.2% in the afternoon session after the stock's momentum improved amid a focus on long-term capital following its recent share buyback program. The stock found support from the company's recent $600 million share repurchase authorization, signaling strong management confidence in its long-term value. In addition, the underlying strength in top-line sales, which continued to outperform estimates, convinced momentum investors that the recent stock sell-off was overdone. Overall, the move suggests the market prioritized BellRing's commitment to returning capital to shareholders and the fundamental demand for its protein products over near-term pressures.
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What Is The Market Telling Us
BellRing Brands’s shares are quite volatile and have had 15 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 4 months ago when the stock dropped 33.3% on the news that the company reported disappointing third-quarter financial results and narrowed its fiscal year 2025 outlook. The sell-off appeared driven by concerns over retailer inventory levels. In May, BellRing first revealed that several key retailers decided to lower their on-hand supply of its nutritional products. This action created a significant headwind for third-quarter growth. Regardless, the quarter itself was fine as BRBR beat across the board (organic revenue growth, total revenue, and EBITDA). However, margins narrowed and EBITDA guidance for the full year fell below expectations. The stock's reaction suggests the market was expecting more given the underwhelming outlook.
BellRing Brands is down 56.8% since the beginning of the year, and at $32.25 per share, it is trading 59.4% 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 $1,306.
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