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How Hain Celestial’s Valuation Stacks Up

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Valuation

Forward PE (price-to-earnings) multiples (stock price divided by analysts’ earnings estimates for the next four quarters) are among most used metrics for making investment decisions. As of April 17, 2018, Hain Celestial (HAIN) was trading at a 12-month forward PE ratio of 17.2x. Since its fiscal 2Q18 release on February 7, 2018, its valuation multiple has fallen 11.1%. The company is trading at a higher valuation multiple than Campbell Soup (CPB), Kellogg (K), and Conagra Brands (CAG), which are trading at 12-month forward PE ratios of 13.2x, 14.1x, and 16.5x, respectively.

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Analysts’ growth estimates

Analysts expect Hain Celestial’s fiscal 2018 revenue to rise 4.9% to $2.9 billion, and its fiscal 2018 adjusted EPS (earnings per share) to rise 36% to $1.66. In fiscal 2019, Hain’s revenue is expected to rise 3.9%, and its adjusted EPS are expected to rise 15.1% to $1.91.

Analysts expect Kellogg’s fiscal 2018 revenue to grow 1.1% to $13.1 million, and its EPS to rise 10.1% to $4.45. In fiscal 2018, analysts expect Campbell Soup’s revenue to rise ~11.1% to $8.7 billion, and its EPS to rise ~3% to $3.13. In fiscal 2019, revenue is expected to increase ~18.2% to $10.4 billion, and EPS are expected to rise ~4% to $3.25.

Analysts expect Conagra’s fiscal 2018 revenue to rise 0.9% to $7.9 billion, and its EPS to rise 17.9% to $2.05. In fiscal 2019, analysts expect its revenue to rise 1.2% to $8.0 billion, and its adjusted EPS to rise 12.7% to $2.31.

Analysts’ estimates are more bullish for Campbell Soup than the other retailers we’re reviewing. The company has reported stellar fiscal 2Q18 results. Going forward, its top line should benefit from innovation and product launches, and its EPS should gain from aggressive cost management and tax reform. Despite these contributions, higher input and logistics costs and shifts to healthier foods are expected to deteriorate sales numbers for some of these retailers.

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