Simply Good Foods Shares Jump 5% After Jefferies Buy Upgrade, $22 Target
Jefferies upgraded Simply Good Foods to Buy from Neutral and cut its price target to $22, lifting shares over 5% intraday. The firm forecasts 2% revenue and 1% earnings growth through 2028 and assigns 10x and 8x EBITDA multiples to Quest and OWYN, implying a $2 billion valuation.
1. Jefferies Upgrade and Share Rally
Jefferies upgraded Simply Good Foods to Buy from Neutral, cut its price target to $22, and noted that shares rose over 5% intraday following the announcement.
2. Brand Growth Trends
The Quest nutrition bar and protein chip brand delivered approximately 17% compound annual growth over the past four years while the Atkins weight-management line declined around 5%.
3. OWYN Acquisition Challenges
The OWYN plant-based protein shake acquisition now represents about 10% of fiscal 2025 sales but has faced slower momentum due to product quality concerns affecting brand perception.
4. Valuation Methodology and Forecasts
Jefferies projects roughly 2% revenue CAGR and 1% earnings CAGR through fiscal 2028, applies 10x and 8x EBITDA multiples to Quest and OWYN, and derives an implied $2 billion equity valuation.