Tiger Brands Ltd (TBSJ.J): Growth and capital returns priced in; Neutral maintained

研报英文原文证据摘录

Tiger Brands Ltd (TBSJ.J): Growth and capital returns priced in; Neutral maintained

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18 Jun 2026 01:00:00 ET │ 20 pages

Tiger Brands Ltd (TBSJ.J)

Growth and capital returns priced in; Neutral maintained

CITI'S TAKE

We maintain our Neutral rating on Tiger Brands but lower our target price to

R310 from R347, primarily by reducing our target PE multiple to 13x from

14.5x. We believe the modest 5.8% DHEPS CAGR from FY25–29e does not Neutral

justify a higher valuation, as shareholder returns from buybacks and special Price (17 Jun 26 17:00) R290.63

dividends appear already priced in. Furthermore, we see downside risk to

frothy Grains EBIT margins, which are peaking due to commodity deflation Target price R310.00↓

and may contract as inflation returns. Rising net finance costs, driven by from R347.00

higher debt, should be a drag on FY26e DHEPS growth. The stock’s PEG Expected share price return 6.7%ratio of 1x appears unfavorable compared to peers (Premier: 0.85x; AVI:

0.68x), and we believe expected margin gains are largely priced in, offering Expected dividend yield 5.9%

limited upside. Expected total return 12.5%

Market Cap R49,442M

Neutral Stance Maintained on Full Valuation — We maintain our Neutral rating on Tiger

US$3,035MBrands, lowering our target price to R310 from R347. Our view is that expected EBIT

margin gains and shareholder returns are already priced into the stock. We are lowering

our target PE multiple to 13x from 14.5x, reflecting a modest DHEPS CAGR (FY25–29e) of

5.8% (BBG cons: 6.8%). This offers limited upside from the current PE of 12.7x, and the

stock's PEG ratio of 1x appears unfavorable versus peers, justifying our Neutral view. Price Performance

(RIC: TBSJ.J, BB: TBS SJ)