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BRBR – Base Case iCDS 102bps, Negative Case iCDS 170bps, 2030 7.000% Bond YTW of 5.995%, iYTW of 5.092%, B1 Rating from Moody’s, IG4 (equivalent to Baa2) Rating from Valens, Low Refinancing Need

December 13, 2024

  • Credit markets are overstating BRBR’s credit risk with a YTW of 5.995% relative to an Intrinsic YTW of 5.092% and an Intrinsic CDS of 102bps. Meanwhile, Moody’s is materially overstating the company’s fundamental credit risk, with its B1 credit rating five notches lower than Valens’ IG4 (Baa2) credit rating.
  • Incentives Dictate Behavior™ analysis highlights mostly negative signals for credit holders. That said, as a positive, all members of management are material owners of BRBR equity relative to their annual compensation. This indicates they may be aligned with shareholders to pursue long-term value creation for the company.
  • Earnings Call Forensics™ analysis of the firm’s Q4 2024 (11/19/2024) highlights that management is confident their creative testing initiatives will bring opportunities in the next quarter and maintain the simplicity of the business. In addition, they are confident their innovation pipeline brings excitement to consumers and retail partners.

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