On Wednesday, Mizuho (NYSE:MFG) Securities reiterated its Outperform rating on Nomad Foods Ltd (NYSE:NYSE:NOMD).
The firm's analysts highlighted the company's positive performance, noting five consecutive months of market-share growth and effective off-shelf merchandising, which suggests strong impulse buying trends.
Nomad Foods' leadership, CEO Stéfan Descheemaeker and CFO Ruben Baldew, shared insights during investor meetings that underline the company's robust execution in the marketplace.
The company's focus on reinvestment for fiscal year 2025 (FY25) includes improving product quality, boosting advertising efforts, and enhancing merchandising. These steps are expected to support another year of organic volume growth following a successful previous year.
The preliminary FY25 guidance provided by Nomad Foods aligns with Mizuho's estimates, projecting organic revenue growth of 1-3% and an adjusted EBITDA increase of 2-4%, which includes significant reinvestment. Adjusted earnings per share (EPS) are anticipated to be between €1.81 and €1.85.
This forecast accounts for a larger year-over-year depreciation and amortization expense, with free cash flow (FCF) conversion predicted to exceed 90%.
Additionally, the company reaffirmed its guidance for fiscal year 2024 (FY24), reinforcing confidence in its financial targets. Mizuho has maintained its EBITDA estimates for FY25 at €557 million and for FY26 at €579 million.
The firm's $24 price target for Nomad Foods stock is based on approximately 9.5 times the firm's estimated calendar year 2025 (CY25) EBITDA, representing around a 10% discount compared to U.S. Food industry peers.
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