TD Cowen Worried About Rising Competition in the Protein Shake Category, Leading to TP Cut on BellRing Brands (BRBR)

BellRing Brands Inc. (NYSE:BRBR) is one of the 11 Best Beaten Down Growth Stocks to Buy Now.

TD Cowens, on February 4, trimmed its target price on BellRing by 11.1% to $24 (from $27). Despite the TP cut, the firm retained its Hold rating on BRBR. TD Cowens cited rising competitive intensity in the shake category, especially in the warehouse club channel, as the key reason for the target price cut. The firm added that higher raw material costs, specifically whey protein, also contributed (albeit to a lesser degree) to the TP cut. This update comes right after BellRing released its Q1-FY2026 results on February 3.

The earnings briefing showed BRBR’s revenue growth slowing down to 1%, as the ready-to-drink (RTD) protein shake segment showed weakness in the 1^st quarter. Revenue from this segment fell 2.2% YoY, as sales in the warehouse club channel collapsed by 14.2% YoY. For TD Cowens, this consumption trend indicates rising competitive intensity in the RTD protein shake market.

Additional data points in BellRings’ supplementary data appear to support this hypothesis. For one, retailers’ inventory has increased in seven of the last eight quarters, suggesting that stock stayed on the shelves longer.

In response to the weak Q1-FY2026 sales, Darcy H. Davenoport, Bell Ring President and CEO, said that the company will be increasing the frequency of its promotional activities. TD Cowens said that while these demand-generating initiatives could boost revenue growth, they would also eat into margins, which are already getting squeezed due to higher whey protein costs.

BellRing Brands Inc. (NYSE:BRBR) distributes ready-to-drink (RTD) protein shakes, ready-to-mix (RTM) powders, and nutrition bars across multiple channels such as warehouse clubs, drugstores, e-Commerce, specialty stores, and convenience stores. The company is located in St. Louis, Missouri, and was founded in March 2019.

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Disclosure: None. This article is originally published at Insider Monkey.