Beverage, Food, and HPC Model Book

Research evidence excerpt

Beverage, Food, and HPC Model Book

S. The thought process here is twofold: 1) over the past

decade, MNST pushed push 40x+ NTM P/E in 4 distinct cycles (2015, 2017, 2023, 2026) and traded

>2x the S&P 500 for much of this time period (2011-2018, 2022-2023). Our current target of 42x is

+120% premium to the market, in-line with historical peak, justified by fundamental strength.

MGPI. Our $21 price target (was $24) is based on a 10.0x P/E and 6.0x EV/EBITDA on our CY27E.

Valuation is below the 3/5-year historical averages, as well as the core U.S. Beverage group median

given impaired visibility on core alcohol segments.

TAP. Our $41 target (was $43) is approximately 9x our CY27E EPS, the low-end of beer multiples

10-15x P/E. The category is soft, TAP is losing share and we see earnings risk namely into 2027. We

see this balanced by a healthy balance sheet and double-digit FCF yield.

Food

KHC. Our $25 target (was $23) is 12.5x CY27E EPS. This implies KHC is low-end of its historical NTM

P/E 3/5/12yr averages 12.4/13.0/16.8x. While trends remain soft and overall volatile, market share

trends have seen some improvement, we think EPS visibility is good for 2026, and easing inflation has

relieved some pressure on 2027 EPS, giving some room to execute on a share recovery story. That all

in mind, we this as a high-end of valuation pending a return to top-line growth in North America.

FRPT. Our $70 price target (was $75) is based on 13.5x EV/EBITDA to our CY27e, implying ~2.7x EV/

sales. Our target EV/EBITDA is just below FRPT's current NTM trading multiple of 14x, and well below

the 3/5 year historical averages of 30x/38x. FRPT is still a growth company with volumes materially

outpacing category, albeit at a slower pace vs prior. Sales will remain debated, but are showing better