Clear-Eyed Picture Of The Problems And Pragmatic Steps To Address Them

Research evidence excerpt

Clear-Eyed Picture Of The Problems And Pragmatic Steps To Address Them

TD Cowen Campbell's Co

Global Research June 18, 2026

VALUATION METHODOLOGY AND RISKS

Valuation Methodology

Food Producers:

We primarily use forward P/E multiples for our coverage. We analyze past and current valuation

premiums to the peer set and we assign valuation premiums/discounts based on the strength of

the brands, quality of the management team, earnings volatility, and other factors. For some of

our small, fast-growing, unprofitable companies we use EV/EBITDA or EV/Sales

Investment Risks

Packaged food companies in our universe generally operate mature brands that have had

difficulty keeping pace with changing consumer preferences. There is currently elevated

macro risk from weakening consumer buying power, push back from retailer customers on

price increases, and elasticity of demand. Mature companies may need to invest in price to

reinvigorate their volume trends and improve their competitiveness. High-growth companies

may face weaker demand for their premium-priced products.

Risks To The Price Target

Upside Risks Include:

1) Reacceleration of retail sales and market share trends from stronger marketing programs

2) Stronger-than-expected margin expansion from commodity cost deflation, productivity

savings, and operational efficiencies in the Snacks division.

3) Faster and/or better-than-expected synergies during Sovos integration.

Downside Risks Include:

1) Sales deceleration, increased promotional activity, and private label competition in key

categories (soup and broth) lead to heightened investment in pricing and profit margin

compression.

2) The company fails to realize expected synergies during Sovos integration, leading to EPS

dilution.

TDSecurities.com 3