Glanbia: Slow Start to the Year, but Guidance Increased Amid Improved Input Cost Visibility

No-moat Glanbia reported a 2.6% like-for-like decline in revenue growth in its first-quarter trading update, driven primarily by a significant volume decline in the nutritional solutions segment. Despite this underwhelming performance, management upgraded slightly full-year 2023 adjusted EPS growth guidance to 7%-11% from 5%-10% previously. This was motivated by improved input cost visibility for the full year (especially in regard to whey), with the group now expecting the performance nutrition segment to deliver an EBITA margin in the range of 12.5%-13.5% (compared with guidance of above 12.5% previously). The EBITA margin outlook for the nutritional solutions segment is unchanged at 12%-13%. The updated guidance aligns with our 2023 forecast and we therefore reconfirm our fair value estimate of EUR 13. Shares appear fairly valued at current levels.