Cavendish raised its price target on Applied Nutrition (LON: APN) to 320p from 285p and reiterated its Buy rating on the stock in a note following a positive trading update, a U.S. acquisition and a licensing deal with Mondelez International, analyst Peter Renton said.
Cavendish also upgraded its FY26 adjusted EBITDA estimate by 5.5% to £41.7 million, FY27 by 8.8% to £47.1 million, and FY28 by 7.9% to £51.9 million.
Applied Nutrition shares surged over 11% on Monday following its update, which also came with an acquisition announcement. The stock added a further 3.9% on Tuesday, closing the session at 282.5p.
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The company revealed it has acquired Nutrablend Group, a U.S.-based sports nutrition manufacturer, for US$16 million, funded from existing cash.
Cavendish said the deal provides the company with $300 million of revenue production capacity and a stronger North American supply chain.
“At c1x book value, we see the price as attractive while derisking its supply chain,” Renton wrote. Nutrablend is expected to contribute $30 million in revenue at an 8% adjusted EBITDA margin in FY27.
Applied Nutrition also revealed a licensing agreement with Mondelez to develop sports nutrition products under the Sour Patch Kids and Swedish Fish brands for U.S. and Canadian markets. The range is set to launch in 2,200 Walmart stores and 1,300 GNC stores from August 2026, though Cavendish has not included any benefit from the deal in its forecasts.
“Positive earnings momentum continues at pace and this is the second time we have upgraded since our initiation in January,” Renton noted. Near-term disruption in the Middle East, a key market for Applied Nutrition, is beginning to normalize, Cavendish added.
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