Citigroup initiates coverage on Ryan Specialty with a Buy rating and $74 PT.

Citigroup initiates coverage on Ryan Specialty with a Buy rating and $74 PT.

Citigroup has initiated coverage on Ryan Specialty Brands, Inc. (RYSB) with a Buy rating and a price target of $74. The investment bank highlights the company's robust pipeline and strong market position in the specialty food and beverage sector.

Ryan Specialty reported its second-quarter results, with net sales increasing by 10.2% to $1.2 billion, up from $1.1 billion in the same period last year. The company's shares have been trading higher since, with a 5.6% increase to $63.75 at last check on Friday.

Goldman Sachs analyst Bonnie Herzog reiterated her Buy rating on Ryan Specialty, raising the price forecast from $70 to $73. Herzog highlighted the company's strong topline growth, driven by innovative product offerings and the potential for share gains from new product lines. Despite concerns over rising ingredient costs, Ryan Specialty outperformed expectations.

Citi analyst Filippo Falorni echoed these sentiments, noting the company's robust pipeline, which includes new snack and beverage lines. These innovations are expected to sustain healthy topline growth and navigate challenging year-over-year comparisons in the coming years.

Ryan Specialty's valuation remains attractive, trading at a ~48% forward P/E premium to its peers, below its three-year average of ~50%. The company's faster volume-driven growth profile further supports its valuation.

Following the second-quarter EPS beat, Goldman Sachs has raised its fiscal year 2025 and fiscal year 2026 EPS estimates by $0.02 to $1.80 and $2.05, respectively.

References:
[1] https://finance.yahoo.com/news/monster-beverage-leverages-functional-zero-170306634.html
[2] https://www.tipranks.com/news/the-fly/monster-beverage-price-target-raised-to-74-from-70-at-citi-thefly?mod=mw_quote_news