Does NewPrinces Still Offer Value After a 61.4% Surge in 2025? A Case for Undervaluation and Niche Growth

The stock of NewPrinces (NWL), a European food and beverage producer, has surged by 61.4% in 2025, raising questions about whether it still offers compelling value. A closer examination of its valuation metrics, profit margins, and positioning within a high-margin niche suggests that the company remains undervalued despite its recent gains. This analysis argues that NewPrinces' disciplined capital allocation, margin expansion, and strategic focus on premium segments position it for long-term growth, even as broader industry pressures persist.

Valuation Metrics: A Discount to Peers and Industry Averages

NewPrinces' current price-to-earnings (P/E) ratio of 9.2x is significantly below its peer average of 17.2x and the European Food industry average of 15.6x. This discount is further amplified when compared to its historical fair P/E ratio of 13.2x, indicating a potential undervaluation of approximately 29%. Similarly, its price-to-book (P/B) ratio of 1.69x lags behind the food processing industry average of 2.18x, reinforcing the case for a valuation gap. These metrics suggest that the market has not fully priced in NewPrinces' cash flow generation or its operational improvements.

A discounted cash flow (DCF) analysis adds weight to this argument, estimating that NewPrinces is undervalued by 25.5%. This discrepancy may stem from the market's underappreciation of the company's ability to navigate macroeconomic headwinds, such as currency fluctuations and inflation, while maintaining profitability.

Margin Expansion: A Strategic Edge in a Pressured Industry

NewPrinces has demonstrated resilience in its profit margins, with EBITDA expanding to 8.1% in the first nine months of 2025, up from 6.2% in the prior year. This improvement outpaces its revenue performance, which fell 5.8% to €1.9 billion due to unfavorable currency exchange rates according to the latest financial report. The company's focus on portfolio optimization and cost discipline has enabled it to grow core profits by 20% despite these challenges.

However, NewPrinces' EBITDA margin of 8.1% remains below the broader food processing industry average of 11.55% in Q3 2025. This gap raises questions about its positioning in a high-margin niche. Yet, within its own business units, the company has achieved notable gains. For instance, its Italian products segment saw a 590-basis-point margin increase, while its food and drinks units improved by 170 basis points each. These results highlight the potential of its premium offerings, particularly in Italian food products, where competitors like Primo Brands Corporation reached 22.9% in Q3 2025.

Niche Positioning: Premium Italian Foods and Strategic Differentiation

While NewPrinces' overall EBITDA margin lags behind industry benchmarks, its performance in premium Italian food products suggests a path to higher-margin growth. The global premium Italian food sector, valued at $24.03 billion in 2024, is projected to grow to $40.77 billion by 2032, driven by demand in Asia-Pacific and the U.S. NewPrinces' focus on this segment aligns with trends such as sustainability and digitalization, which are reshaping consumer preferences.

Moreover, the company's acquisition strategy-such as its purchase of Princes at 4.2x EV/EBITDA-has historically enhanced efficiency and market share. These moves position NewPrinces to capitalize on consolidation trends in the food and beverage sector, where strategic buyers prioritize supply chain resilience and premium branding.

Long-Term Growth: Balancing Risks and Opportunities

The broader food and beverage industry faces headwinds, including inflation, tariffs, and subdued consumer demand according to market analysis. Yet, NewPrinces' leverage ratio of below 2.0x and its target to further improve EBITDA margins for 2025 demonstrate a disciplined approach to capital management as reported in Q3 earnings. This prudence contrasts with peers like Molson Coors, which reported a U.S. GAAP net loss in Q3 2025 despite non-GAAP earnings, underscoring the importance of operational flexibility.

For investors, the key question is whether NewPrinces can sustain its margin growth in a competitive landscape. Its current valuation multiples, combined with its niche focus on premium Italian foods and specialty beverages, suggest that the market has not yet priced in its full potential.

Conclusion: A Case for Value and Resilience

Despite a 61.4% surge in 2025, NewPrinces remains attractively valued relative to its peers and the broader industry. Its P/E and P/B ratios, coupled with a DCF-based undervaluation, indicate a margin of safety for long-term investors. While its EBITDA margins lag behind the food processing industry average, its strategic emphasis on premium segments and operational efficiency positions it to capture growth in a sector poised for consolidation and innovation. For those willing to look beyond short-term volatility, NewPrinces offers a compelling case of undervaluation and niche-driven potential.