BellRing Brands is showing constructive action in a base with earnings around the corner. The protein powder maker has a 3-year earnings growth rate of 29% and has averaged 39.4% profit growth over the last three quarters, according to Investor's Business Daily's IBD Stock Checkup.
The IBD 50 Growth Stocks To Watch name is easing Wednesday after rising 3.3% Tuesday. UBS initiated coverage on the nutritional products stock with a neutral rating and an 81 price target Wednesday.
BellRing Brands makes nutritional products including protein powders and shakes under brands Premier Protein, Dymatize, and PowerBar. Its PowerBar brand is sold in over 35 international markets with a concentration in Europe.
The IBD 50 stock ranks No. 2 out of 43 stocks in the Cosmetic/Personal Care group, which holds the 67th spot out of the 197 industry groups that Investor's Business Daily tracks.
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Protein Powder Stock Sets Up As Earnings Loom
BellRing stock is in a 12-weeks-long first-stage consolidation pattern with an 80.67 buy point, according to MarketSurge pattern recognition. But the buy point is only used during strong market environments and IBD continues to recommend 0% to 20% stock market exposure.
Investors should be cautious of breakouts and new buys during the current market correction and should follow risk management rules, including cutting losses at 7%.
The entry point is also its all-time high reached on Jan. 30, after the stock attempted to break out of a second-stage flat base with a 79.90 buy point. But the breakout didn't progress and the stock deteriorated before falling below the flat-base low, resetting the base count.
Now, shares are showing tight weekly closes after retaking their 10-week moving average, both positive signs for the stock.
The stock's 21-day average true range, or ATR, is 4.2%. In the current, unpredictable market, IBD suggests stocks with ATRs of 3% or below.
Its relative strength line reached a 52-week high as shown by the blue dot on its weekly chart, though its daily line is ticking lower. Shares are relatively flat so far this year.
BellRing Brands Raises Guidance
BellRing topped fiscal first-quarter earnings and sales forecasts Feb. 3. Revenue grew 23.8% while profit climbed 35%. The company's gross margin improved to 37.5% from 34.4% a year ago.
"Our momentum remains high, with the convenient nutrition category continuing to drive robust growth. Our strong start to 2025 gives us greater confidence in the full year and drove our decision to raise our outlook," BellRing Chief Executive Darcy Davenport said in the earnings release.
BellRing now expects fiscal year 2025 net sales in the range of $2.26 billion to $2.34 billion.
Fiscal second-quarter sales projections call for a 17% increase, then a slide to 11% over the following three quarters. Analyst forecasts show fiscal 2025 earnings increasing 17% then rising 14% in fiscal 2026.
BellRing is expected to release its fiscal second-quarter earnings results on May 5. Its earnings line — as shown as a green line on the weekly chart — has been on a steady climb since November 2020.
It holds a 95 IBD Earnings Per Share Rating and 93 Composite and Relative Strength Ratings.
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