Glanbia Earnings: EPS Guidance Increased on Lower Input Costs

No-moat Glanbia delivered 6.6% growth in adjusted EPS (constant currency) in the first half of 2023. Solid pricing in the performance nutrition, or GPN, segment and a 110-basis-point improvement to 7.2% in the group EBITA drove this. Volumes continued to deteriorate in both GPN and the nutritional solutions segment, driven by customer destocking and lower demand for the brand SlimFast. Management expects that the volume picture will improve in the second half of the year and input costs will continue to decrease, which should support a stronger EBITA margin for the year than previously expected. Consequently, full-year guidance for constant-currency adjusted EPS growth has been increased to 12%-15% from 7%-11% previously. We will likely increase our fair value estimate by a low-single-digit percentage after updating our model, but we continue to view shares as appropriately priced at current levels.