The projection of $9 in free cash flow (FCF) for Premium Brands in 2027 could be optimistic if the assumptions about EBITDA and capital expenditure (CapEx) are too generous. If depreciation is higher than expected or if maintenance CapEx proves to be more than projected, the FCF might fall below expectations. Additionally, changes in market conditions, such as rising costs or declining revenue, could further erode profitability, making the $9 target harder to achieve. A conservative estimate of FCF should account for these potential risks.
Great post! I appreciate your thorough explanation and your use of quotes from the company's letter. It is a challenging topic, and in the “commodity industry,” offering promising returns without a concrete plan can be daunting
Thanks for the writeup, I really like it. A tough one in my opinion, at the moment you need to put a lot of trust in the management and if they are able to really step up the returns with all the investments.
Thanks Waits. There's just too much faith that needs to be put in management right now, and unfortunately, if management is deserving of that faith, by the time it's apparent that the plan is working , the stock will almost certainly be priced higher.
The projection of $9 in free cash flow (FCF) for Premium Brands in 2027 could be optimistic if the assumptions about EBITDA and capital expenditure (CapEx) are too generous. If depreciation is higher than expected or if maintenance CapEx proves to be more than projected, the FCF might fall below expectations. Additionally, changes in market conditions, such as rising costs or declining revenue, could further erode profitability, making the $9 target harder to achieve. A conservative estimate of FCF should account for these potential risks.
Great post! I appreciate your thorough explanation and your use of quotes from the company's letter. It is a challenging topic, and in the “commodity industry,” offering promising returns without a concrete plan can be daunting
Thank you for the kind words.
Thanks for the writeup, I really like it. A tough one in my opinion, at the moment you need to put a lot of trust in the management and if they are able to really step up the returns with all the investments.
Thanks Waits. There's just too much faith that needs to be put in management right now, and unfortunately, if management is deserving of that faith, by the time it's apparent that the plan is working , the stock will almost certainly be priced higher.