Large, pure-play vitamins, minerals, and supplements, or VMS, assets with international reach such as Jamieson Wellness (JWEL.TO) have historically commanded premium valuations, CIBC Capital Markets said in a research report.
Analyst Ty Collin maintained an Outperformer rating and $44 price target on shares of the Canadian health and supplement brand that has products in more than 50 countries and regions following a report that it's exploring a sale of the company.
The stock rose 10% to C$40.18 on the Toronto Stock Exchange Thursday.
"JWEL has long been talked about as a takeout candidate," Collin said in a note to clients. "Overall, we are not especially surprised by this news considering our view that valuation has been modest, and the fact that public markets have given JWEL little recognition for the strong growth delivered by its international expansion strategy in recent years."
The analyst said that despite approximately 40% earnings per share growth since 2021, the share price performance has essentially been flat for five years.
"While we do not necessarily expect a 20x+ multiple for JWEL, we note that large, pure-play VMS assets with international reach are rare, highly coveted, and have commanded premium valuations historically," Collin said. "For reference, a 14x 2026E takeout multiple for JWEL (in line with its longer-term average) would equate to a $50 share price and a 37% takeout premium."
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