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CONSUMER STAPLES: JDE Peets (Baa3/BBB-/BBB) new CEO & FY guidance affirmed

CONSUMER STAPLES
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"*JDE Peet's Shares Up 11% After Naming New CEO, Backing Guidance"-bbg

  • stock is volatile on the low free float (<25%) and is reversing recent losses - some of which was triggered on EU regulation headlines
    • see here but we saw limited read-through for Peets
  • the reaffirmed FY guidance is for organic sales at high end of 3-5%, organic adj. EBIT growth of ~10%, FCF>€850m, net leverage <3x and stable dividend.
  • new CEO is ex. Kraft operator see here

We have generally seen value in Peets curve - Barry used to be the widest in IG F&B but Peets underperformance leaves it flat to it. Reminder it it said the Sept '24 and Jan '25 lines have already been refinanced with "no immediate funding needs" - next maturity is €750m Jan 26s. Spot coffee price remain elevated {KCU5 Comdty; 247} & {DFU5 Comdty; 4264} - Peets does have good history in its ability to pass this through (and was quoted as reason for the FY guidance upgrade in 1H) - but does leave investors exposed to potential margin vol.

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"*JDE Peet's Shares Up 11% After Naming New CEO, Backing Guidance"-bbg

  • stock is volatile on the low free float (<25%) and is reversing recent losses - some of which was triggered on EU regulation headlines
    • see here but we saw limited read-through for Peets
  • the reaffirmed FY guidance is for organic sales at high end of 3-5%, organic adj. EBIT growth of ~10%, FCF>€850m, net leverage <3x and stable dividend.
  • new CEO is ex. Kraft operator see here

We have generally seen value in Peets curve - Barry used to be the widest in IG F&B but Peets underperformance leaves it flat to it. Reminder it it said the Sept '24 and Jan '25 lines have already been refinanced with "no immediate funding needs" - next maturity is €750m Jan 26s. Spot coffee price remain elevated {KCU5 Comdty; 247} & {DFU5 Comdty; 4264} - Peets does have good history in its ability to pass this through (and was quoted as reason for the FY guidance upgrade in 1H) - but does leave investors exposed to potential margin vol.

Keep reading...Show less