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PBH Stock Might Get a Boost From Focused Brand-Building Efforts
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Prestige Consumer’s (PBH - Free Report) brand-building strategy, market share gains in its leading brands as well as growing strength in the e-commerce channel are tailwinds. The stock currently carries a Zacks Rank #2 (Buy).
Factors Driving PBH Stock
Prestige Consumer’s diverse portfolio of well-recognized consumer brands benefits from robust marketing strategies that are designed to enhance sales growth and long-term profitability across major and core brands. The company has a long and successful history in the Eye & Ear Care category with a wide assortment of leading brands like Clear Eyes, TheraTears and Debrox.
During the first quarter of fiscal 2025, the company successfully moved supply-constrained Clear Eye products to customers more rapidly than anticipated to meet demand. This helped eye and ear care category performance exceed the company’s expectations and boosted the TheraTears, Debrox and Sty brands. Prestige Consumer is experiencing impressive growth in the e-commerce channel, continuing the long-term trend of growing online purchases.
Its markets continue to grow on a multiyear basis. At the end of fiscal 2024, on a three-year basis, the company experienced over 20% sales growth annually.
Building great brands is the cornerstone of Prestige Consumer’s long-term growth strategy. The company emphasizes brand building and product innovation in niche consumer healthcare categories to better improve the lives of its consumers. Its long-term brand-building initiatives, combined with efficient marketing, channel development and innovative approaches, have led Prestige’s brands to consistently hold a leading market share.
Image Source: Zacks Investment Research
In the first quarter of fiscal 2025, the company’s strong international growth was broad-based, driven by the Hydrolyte brand (an oral hydration products brand famous in Australia). With a 20-plus-year history in the market, the majority of Australians recognize the brand immediately and turn to it in sickness, sport and exercise, and excessive heat. The brand remains a large portion of the company’s international business and represents the majority of its sales in Australia.
The stock has risen 21.4% year to date, outperforming the industry’s 12.3% growth. With the company gaining synergies from its several strategic initiatives in the healthcare arena, we expect the stock to continue its upward movement in the coming days.
Concerns for PBH Stock
Economic conditions in both the United States and globally have been and will continue to be volatile due to several factors, such as supply-chain constraints, rising interest rates, a high inflationary environment and geopolitical events. These uncertainties could put pressure on prices and supply and potentially affect the demand for Prestige Consumer’s products. The cost of sales for the International OTC Healthcare segment increased 6.9% during the first quarter of fiscal 2025 due to continued cost inflation and the use of higher-cost air freight on Clear Eye’s products. Advertising and marketing expenses rose 16.2% year over year in the reported quarter.
Prestige Consumer generally relies on brokers and distributors for the sale of its products in foreign countries, having generated approximately 14.8% of fiscal 2024 revenues from its international business. Hence, fluctuating foreign exchange rates remain a concern, which could result in unfavorable increases in the price of the company’s products or cause increases in the cost of certain products purchased from its foreign third-party manufacturers. In the fourth quarter of fiscal 2024, approximately 14.9% of gross revenues were denominated in currencies other than the U.S. dollar. For fiscal 2025, the company anticipates organic revenue growth of approximately 1% with a slight foreign exchange headwind.
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PBH Stock Might Get a Boost From Focused Brand-Building Efforts
Prestige Consumer’s (PBH - Free Report) brand-building strategy, market share gains in its leading brands as well as growing strength in the e-commerce channel are tailwinds. The stock currently carries a Zacks Rank #2 (Buy).
Factors Driving PBH Stock
Prestige Consumer’s diverse portfolio of well-recognized consumer brands benefits from robust marketing strategies that are designed to enhance sales growth and long-term profitability across major and core brands. The company has a long and successful history in the Eye & Ear Care category with a wide assortment of leading brands like Clear Eyes, TheraTears and Debrox.
During the first quarter of fiscal 2025, the company successfully moved supply-constrained Clear Eye products to customers more rapidly than anticipated to meet demand. This helped eye and ear care category performance exceed the company’s expectations and boosted the TheraTears, Debrox and Sty brands. Prestige Consumer is experiencing impressive growth in the e-commerce channel, continuing the long-term trend of growing online purchases.
Its markets continue to grow on a multiyear basis. At the end of fiscal 2024, on a three-year basis, the company experienced over 20% sales growth annually.
Building great brands is the cornerstone of Prestige Consumer’s long-term growth strategy. The company emphasizes brand building and product innovation in niche consumer healthcare categories to better improve the lives of its consumers. Its long-term brand-building initiatives, combined with efficient marketing, channel development and innovative approaches, have led Prestige’s brands to consistently hold a leading market share.
Image Source: Zacks Investment Research
In the first quarter of fiscal 2025, the company’s strong international growth was broad-based, driven by the Hydrolyte brand (an oral hydration products brand famous in Australia). With a 20-plus-year history in the market, the majority of Australians recognize the brand immediately and turn to it in sickness, sport and exercise, and excessive heat. The brand remains a large portion of the company’s international business and represents the majority of its sales in Australia.
The stock has risen 21.4% year to date, outperforming the industry’s 12.3% growth. With the company gaining synergies from its several strategic initiatives in the healthcare arena, we expect the stock to continue its upward movement in the coming days.
Concerns for PBH Stock
Economic conditions in both the United States and globally have been and will continue to be volatile due to several factors, such as supply-chain constraints, rising interest rates, a high inflationary environment and geopolitical events. These uncertainties could put pressure on prices and supply and potentially affect the demand for Prestige Consumer’s products. The cost of sales for the International OTC Healthcare segment increased 6.9% during the first quarter of fiscal 2025 due to continued cost inflation and the use of higher-cost air freight on Clear Eye’s products. Advertising and marketing expenses rose 16.2% year over year in the reported quarter.
Prestige Consumer generally relies on brokers and distributors for the sale of its products in foreign countries, having generated approximately 14.8% of fiscal 2024 revenues from its international business. Hence, fluctuating foreign exchange rates remain a concern, which could result in unfavorable increases in the price of the company’s products or cause increases in the cost of certain products purchased from its foreign third-party manufacturers. In the fourth quarter of fiscal 2024, approximately 14.9% of gross revenues were denominated in currencies other than the U.S. dollar. For fiscal 2025, the company anticipates organic revenue growth of approximately 1% with a slight foreign exchange headwind.
Key Picks
Some other top-ranked stocks in the broader medical space are Intuitive Surgical (ISRG - Free Report) , TransMedics Group (TMDX - Free Report) and Quest Diagnostics (DGX - Free Report) . While Intuitive Surgical and TransMedics sport a Zacks Rank #1 (Strong Buy) each, Quest Diagnostics carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Intuitive Surgical’s shares have surged 56% in the past year. Estimates for the company’s earnings have moved north 5.1% to $1.65 per share for 2024 in the past 30 days.
ISRG’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 8.97%. In the last reported quarter, it posted an earnings surprise of 16.34%.
Estimates for TransMedics’ 2024 EPS have moved up 125% to 27 cents in the past 30 days. Shares of the company have soared 135% in the past year compared with the industry’s 12.7% growth.
TMDX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 287.50%. In the last reported quarter, it delivered an earnings surprise of 66.67%.
Estimates for Boston Scientific’s 2024 EPS have increased 1.7% to $2.40 in the past 30 days. In the past year, shares of BSX have risen 49.5% compared with the industry’s 15.3% growth.
In the last reported quarter, BSX delivered an earnings surprise of 6.90%. Its earnings surpassed estimates in each of the trailing four quarters, the average surprise being 7.18%.