The Marzetti Company (MZTI): what the price assumes
In the published model solve dated 2026-Q2, anchored at $111.37, The Marzetti Company (MZTI) is priced for -3.3% growth. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-06-27.
Generated: 2026-08-10 · Exported: 2026-08-12 · Source: https://boothcheck.com/report/MZTI
Headline
| Field | Value |
|---|---|
| Ticker | MZTI |
| Company | The Marzetti Company |
| Current price | $111.37/sh |
| Composition | Retail - Shelf-stable dressings, sauces and croutons 23% / Retail - Frozen breads 20% / Retail - Refrigerated dressings, dips and other 10% / Foodservice - Dressings and sauces 35% / Foodservice - Frozen breads and other 12% / Foodservice - Other dressings and sauces for TSA 1% |
What The Price Assumes (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin (value-band context) | 4.3% |
| Operating margin today | 11.3% |
| Margin compression (value-band) | -7.0pp |
| Implied growth | -3.3% |
| Multiple paid | 13x operating income |
The operating-margin figure is value-band context at year 12: derived from the framework's value band, a separate calculation — not part of the priced-in solve.
Solve inputs: computed at a 8.1% cost of capital with 4% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~5.9pp.
Reconcile: at the x-ray's 9.3% required return this reads ~3.4%/yr; the models below use their own rates.
How unusual the bet is: within-range
| Reference | Value |
|---|---|
| vs own history | -0.70σ |
| cohort percentile (of 69 peers) | 15 |
| implied end-window share | 0% |
Valuation X-Ray
Asset, earnings-power and peer-multiple models all land far below the price; ONLY the growth-DCF reaches it. The bet is durable compounding the static frames structurally cannot price (a moat/durability premium).
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 1.50x | 5 | expensive |
| Earnings | 1.55x | 5 | expensive |
| Relative | 2.47x | 2 | expensive |
| Growth | 1.17x | 4 | expensive |
Families that justify the price: Growth Families that call it expensive: Asset, Earnings, Relative
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 9.2%); the inversion above states its own rate.
Per-Model Detail (n=16)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $149.45 | 0.75x | yes | FCF base $0.2B, growth 3% (input: historical growth), terminal g 2.9%, WACC 9.2%, 5yr projection |
| DCF Exit Multiple | Growth | $118.88 | 0.94x | yes | Exit EV/EBITDA: 8.6x / 10.6x / 12.6x (bear / base = today's held flat / bull), 5yr |
| Relative Valuation | Relative | — | — | no | P/E 22x (static sector reference · 2026-04), scenarios: 18.6x / 22.0x / 25.4x (bear / base = reference held flat / bull), EV/EBITDA 14x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | $69.09 | 1.61x | yes | Stage 1: 2% for 5yr, Stage 2: 3.5% perpetual |
| Simple Excess Return | Asset | $69.44 | 1.60x | yes | BV/sh $38.16, ROE (TTM) 16.8%, ke 9.3% |
| Two-Stage Excess Return | Asset | $92.45 | 1.20x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $79.28 | 1.40x | yes | Rev $1.9B, growth 3% (input: historical growth; tapered), Terminal P/S: 1.3x / 1.6x / 1.8x (bear / base = today's held flat / bull, cap 8x) |
| Peter Lynch Fair Value | Relative | $76.68 | 1.45x | yes | EPS $6.39, growth 2% (input: historical EPS growth), PEG=7.03 (Overvalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $64.66 | 1.72x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $0.19B × (1−23%) / WACC 9.2% → EPV (no growth) |
| Residual Income | Asset | $93.17 | 1.20x | yes | BV $38.16 + 5yr PV of (ROE (TTM) 16.8% − Kₑ 9.3%) × BV; BV grows 8.8%/yr |
| Graham Number | Asset | $74.07 | 1.50x | yes | √(22.5 × EPS $6.39 × BVPS $38.16) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | — | — | no | EBITDA $0.27B × sector EV/EBITDA 14.0x |
| FCF Yield | Earnings | $104.54 | 1.07x | yes | FCF $248.0M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $100.51 | 1.11x | yes | SBC-adj FCF $0.24B (FCF $0.25B − SBC $0.01B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $71.92 | 1.55x | yes | EPS $6.39 × (8.5 + 2×2.5%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $17.19 | 6.48x | yes | BV $38.16 × (ROIC 4.1% / WACC 9.2%) |
| P/Sales Sector | Relative | — | — | no | Revenue $1.94B × sector P/S 2.0x |
| PEG Fair Value | Relative | $31.95 | 3.49x | yes | EPS $6.39 × (PEG 1.5 × growth 2.5% (input: historical EPS growth)) → PE 3.7x |
| Earnings Yield | Earnings | $69.08 | 1.61x | yes | EPS $6.39 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Economic-Unit Decomposition (Sum Of The Parts)
One or more material disclosed units has unresolved economics. Unknown/general is not evidence of homogeneity: segment SOTP is primary but incomplete, consolidated cash flow may remain only a secondary cross-check when every unit shares an enterprise basis, and one sector multiple or target margin is withheld.
| Unit | Role | Valuation basis | Revenue | Reported profit | Value evidence | Status |
|---|---|---|---|---|---|---|
| Retail | operating | enterprise | $1.0b | $211.7m operating-income | withheld | unresolved no unit value |
| Foodservice | operating | enterprise | $905.7m | $111.6m operating-income | withheld | unresolved no unit value |
No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.
Solvency
| Field | Value |
|---|---|
| Net cash | $216.9m |
| Net debt / NOPAT (after-tax) | -1.29x (net cash) |
| Net debt / operating income (pre-tax) | -0.99x (net cash) |
| Share count CAGR (buyback) | -0.1% |
| Burning cash | no |
Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.
Bullet Takeaways
The Marzetti Company (formerly Lancaster Colony) makes specialty dressings, sauces, and frozen breads, split roughly evenly between retail and foodservice. Trailing operating margin is about 11.3%, and the most recent quarter showed net sales of $453.4 million, down about 1% year over year, with the story shifting from price-led growth toward volume and new products.
At $107.05 (June 27, 2026) the price pays about 12x company-wide operating income, low enough that it sits below what even a 5%-per-year operating-profit decline would justify. Across the valuation families the price is broadly consistent with plausible outcomes, supported by relative-multiple and growth methods rather than stretched by them.
The balance sheet is unusually clean for a packaged-food name: about $218 million of liquid assets against roughly $1.6 million of gross debt, so net cash near $217 million. That cash and a rising dividend are the safety net under a low-growth but durable franchise.
Bull Case
The direction of the business is the bull case, even though the headline top line is flat. Fiscal Q3 2026 net sales were $453.4 million, down about 1% year over year, but the mix underneath is improving: the company has shifted from pricing-driven growth to volume and innovation, launching Marzetti Protein Ranch as a first-to-category protein dressing line and refreshing its Simply Dressed range, while operating margin has held around 11%. A consumer-staples maker that can keep margins steady while pivoting from price to volume is doing the harder version of growth, and it is funding a dividend that was raised to an indicated $3.95 per share for fiscal 2026 from $3.75 the year before.
The franchise economics are better than the modest growth suggests. The retail segment sells through brokers and distributors into the shelf-stable grocery aisle, carrying both the company's own brands and licensed sauces and dressings (FY2025 10-K, accession 0000057515-25-000020). Those licenses, for names like Olive Garden, Chick-fil-A, Buffalo Wild Wings, and Texas Roadhouse, let Marzetti sell the at-home version of restaurant flavors consumers already know, which is a low-capital way to win shelf space. The result is a trailing return on invested capital near 25% against a cost of capital around 8%, the signature of a business that earns well above its capital cost without needing heavy reinvestment.
The balance sheet turns that into optionality. With roughly $218 million of liquid assets and essentially no debt, the company holds net cash near $217 million, which it has begun deploying into bolt-on expansion: it agreed to acquire Bachan's, a Japanese barbecue-sauce brand, extending its position in the fast-growing sauce category, after earlier adding sauce-and-dressing production capacity. Tuck-in deals funded from cash, in a category where the company already has distribution and licensing strength, are exactly how a mature staples name adds incremental growth without diluting its returns or its margin.
Bear Case
The most fragile assumption baked into the price is that the licensed-brand and key-customer relationships hold, because the revenue base is more concentrated than a diversified-staples label implies. The filing is explicit that net sales to Walmart were 19% of consolidated net sales in fiscal 2025, and that Chick-fil-A, sold both into foodservice and into the retail channel under an exclusive license, is also a significant contributor (FY2025 10-K, accession 0000057515-25-000020). The company itself calls the intellectual-property rights essential to its foodservice business. A loss or renegotiation of one anchor license, or a shelf decision at one giant retailer, would hit the top line in a way the current multiple does not appear to fear.
The second soft spot is the growth narrative itself. Net sales fell about 1% in the latest quarter, and the pivot from pricing to volume means the company is now relying on new products like Protein Ranch and on acquisitions like Bachan's to replace the growth that price increases used to provide. New-product success in packaged food is uncertain, and the volume recovery is not yet visible in reported sales. If the innovation pipeline and the foodservice restaurant traffic both stay soft, the business looks less like a compounder and more like a flat, cash-rich franchise, which is a different valuation.
The counterweight is that the price already reflects a lot of this. At roughly 12x operating income, below what even a 5%-per-year profit decline would warrant, the market is not paying for the optimistic case. That limits the downside but also frames the trade honestly: the bear risk is not a collapse, it is that a cheap, slow staples name stays cheap and slow, with the licensed-brand concentration as the one genuine tail risk that could turn flat into down.
Valuation
At the current price the market is paying about 12x company-wide operating income, a multiple low enough that the price sits below what even a 5%-per-year operating-profit decline would warrant. That is a bound rather than a solved point: computed at a cost of capital near 8.1% with 4% terminal growth over a five-year stage, the price does not require growth at all, it only requires the profit base not to erode faster than a modest decline. The near-term pace the company has delivered is well within that, so the implied bar is undemanding.
The family pattern confirms a within-range read. The asset, earnings-power, and growth methods all land close to the price, and the relative-multiple method actually sits below it, meaning peers would justify an even higher quote. No family flags the stock as expensive. The reverse-DCF range on a whole-company basis centers above the current price with an acceptable reliability flag, which is consistent with a stable, high-return franchise being priced for caution rather than for growth.
What anchors the floor is the balance sheet and the returns. Net cash of roughly $217 million and a return on invested capital near 25% against an 8% cost of capital mean a large part of the enterprise value is backed by cash and by demonstrated earning power, not by a forecast. The valuation question here is not whether the price is paying for too much optimism, it clearly is not, but whether the business can convert its clean balance sheet and licensing strength into enough volume growth to re-rate. The price is a low bar; clearing it depends on execution, not on the multiple.
Catalysts
The most recent print, fiscal Q3 2026 (quarter ended March 31, 2026), showed consolidated net sales of $453.4 million, down about 1% year over year, with trailing-twelve-month revenue near $1.94 billion. The company framed the quarter around record areas of the business and a continued shift from pricing to volume, while holding operating margin around the low teens. The dividend was set at an indicated $3.95 per share for fiscal 2026, up from $3.75.
The forward catalysts are product launches and the acquisition pipeline. The company introduced Marzetti Protein Ranch, a first-to-category protein dressing and dip line, and refreshed its Simply Dressed lineup, and in February 2026 it agreed to acquire Bachan's, a Japanese barbecue-sauce brand, extending its sauce position after an earlier purchase of sauce-and-dressing production capacity. The next quarterly report is the key event: it tests whether volume growth and new products can offset the loss of pricing-led gains and turn the flat top line positive.
The watch items are input costs, foodservice restaurant traffic, and the licensed-brand relationships. Soft restaurant demand pressures the foodservice half of the business, and any change in a major license or a key retail relationship would matter more than the financials alone suggest. A return to volume-led growth, helped by the Bachan's integration and new launches, would be the cleanest positive signal. Sources: Marzetti Q3 fiscal 2026 results and company releases (stocktitan.net; finance.yahoo.com; businesswire.com), 2026.
Peer Cohorts (Per Segment, With Filing Citations)
Retail (reported)
- HRL (HORMEL FOODS CORPORATION)
- FY2025 10-K: …is included in segment profit; however, earnings attributable to the Company's corporate venturing investments and noncontrolling interests are excluded. These items are included below as Net Unallocated Expense and Noncontrolling Interest when reconciling to Earnings Before Income Taxes. The Company is an integrated…
- FY2025 10-K: …indicated that the Justin's ® trade name was more likely than not impaired, prompting a quantitative impairment test. As a result of the quantitative impairment test, an impairment charge was recognized in the Retail segment of $ 28.4 million. No other indefinite-lived intangible impairments were indicated in the…
- CPB (THE CAMPBELL'S COMPANY)
- FY2025 10-K: …new and improved products to satisfy those preferences, our sales will decline. Weak economic conditions, recessions, significant inflation, government regulation (including in the health and wellness space) and other factors, such as pandemics, could affect consumer preferences and demand. In addition, given the…
- FY2025 10-K: …to segments. All other components of expense, including interest cost, expected return on assets, amortization of prior service credits and recognized actuarial gains and losses are reflected in Corporate and not included in segment operating results. Asset information by segment is not discretely maintained for…
- SJM (THE J. M. SMUCKER COMPANY)
- FY2025 10-K: International and Away From Home 20.6 17.4 U.S. Retail Coffee The U.S. Retail Coffee segment net sales increased $102.2 in 2025. Net price realization increased net sales by 5 percentage points, primarily driven by higher net pricing for the Folgers and Café Bustelo brands, partially offset by lower net pricing for…
- FY2025 10-K: …the domestic sales of Folgers , Dunkin' , and Café Bustelo branded coffee; the U.S. Retail Frozen Handheld and Spreads segment primarily includes the domestic sales of Uncustables , Jif , and Smucker's branded products; the U.S. Retail Pet Foods segment primarily includes the domestic sales of Meow Mix , Milk-Bone ,…
- CAG (CONAGRA BRANDS, INC.)
- FY2025 10-K: ($ in millions) Fiscal 2025 Fiscal 2024 % Inc Reporting Segment Net Sales Net Sales (Dec) Grocery & Snacks $ 4,899.3 $ 4,958.7 (1.2)% Refrigerated & Frozen 4,662.3 4,865.5 (4.2)% International 956.5 1,078.3 (11.3)% Foodservice 1,094.7 1,148.4 (4.7)% …
- FY2025 10-K: …in brand intangibles and goodwill as a result of declining sales, reductions to our assumed royalty rates due to lower-than-expected profit margins, and other economic conditions such as increases to interest rates. In fiscal 2025, 2024, and 2023, we recorded total indefinite-lived intangibles impairments of $72.1…
- MKC (McCORMICK & COMPANY, INCORPORATED)
- FY2025 10-K: …sold directly to customers as well as through brokers, wholesalers, and distributors. In the Consumer segment, products are then sold to consumers under a number of brands through a variety of retail channels, including grocery, mass merchandise, warehouse clubs, discount and drug stores, and e-commerce. In the…
- FY2025 10-K: …to manage segment performance and allocate resources across segments and considers variances of actual performance to our annual budget and periodic forecasts as well as year over year performance when making decisions. Special charges and transaction and integration expenses are excluded from operating income in our…
- FLO (FLOWERS FOODS, INC)
- FY2025 10-K: …occurs after the products are delivered to the customer. Revenue is recognized at a point in time when control transfers. The company pays commissions to brokers who obtain contracts with customers. Commissions are paid on the total value of the contract, which is determined at contract inception and is based on…
- FY2025 10-K: …and regional restaurants, institutions and foodservice distributors, and retail in-store bakeries with breads and rolls; (2) sell packaged bakery products to wholesale distributors for ultimate sale to a wide variety of food outlets; and (3) sell packaged snack cakes primarily to customers who distribute them…
- LW (Lamb Weston Holdings, Inc.)
- FY2025 10-K: …3%, reflecting planned investments in price and trade driven by an increasingly competitive market, with moderate offsets in channel and product mix. Despite a low single-digit percentage point decline related to softer North America restaurant traffic in fiscal 2025, compared with fiscal 2024, volume increased 1%.…
- FY2025 10-K: …2023, Senior Vice President and General Manager of Foodservice, Retail, Marketing and Innovation from April 2018 until May 2023 and Senior Vice President, Growth and Strategy from September 2016 until April 2018. Mr. Smith also served as Vice President and General Manager of Lamb Weston Retail from May 2011 to…
Foodservice (reported)
- LW (Lamb Weston Holdings, Inc.)
- FY2025 10-K: Condition and Results of Operations" and Note 13, Segments, of the Notes to Consolidated Financial Statements in "Part II, Item 8. Financial Statements and Supplementary Data" of this Form 10-K. North America Our North America segment primarily includes frozen potato products sold in the United States, Canada, and…
- FY2025 10-K: …2023, Senior Vice President and General Manager of Foodservice, Retail, Marketing and Innovation from April 2018 until May 2023 and Senior Vice President, Growth and Strategy from September 2016 until April 2018. Mr. Smith also served as Vice President and General Manager of Lamb Weston Retail from May 2011 to…
- HRL (HORMEL FOODS CORPORATION)
- FY2025 10-K: Foodservice segment. Risks to this outlook include a softening of foodservice industry demand, lower-than-expected raw material markets which through market-based pricing can negatively impact net sales, and higher-than-expected operating costs. International Fourth Quarter Ended Fiscal Year Ended In thousands October…
- FY2025 10-K: …joint venture. The Foodservice segment consists primarily of the processing, marketing, and sale of food products to distributors and operators across a wide range of providers of food away from home, including restaurants, hospitality, healthcare, K-12, college and universities, and convenience stores in the U.S.…
- INGR (INGREDION INCORPORATED)
- FY2025 10-K: …F&II-U.S./Canada's customers include global brands that generally tend to source ingredients locally. The starch and sweetener industry in the U.S. and Canada is highly competitive, and competition within these markets is largely based on product functionality, price and quality. F&II-U.S./Canada's competitors…
- FY2025 10-K: …Some natural high-intensity sweeteners, such as stevia, provide a sweetness or functional alternative to full-caloric sweeteners for our customers. Some food and beverage customers seek these alternatives for their reduced-calorie or sugar-free foods and beverages. Our sweetener products represented 34 percent, 35…
- JJSF (J&J SNACK FOODS CORP.)
- FY2025 10-K: The Food Service and the Frozen Beverages segments sell primarily to foodservice channels. The Retail Supermarkets segment sells primarily to the retail supermarket channel. The Company's customers in the Food Service segment include snack bars and food stands in chain, department and mass merchandising stores, malls…
- FY2025 10-K: …Chief Operating Decision Maker currently reviews the monthly detailed operating income statements, we have reclassified certain corporate expenses that are not allocated to our three reportable segments. This change in presentation resulted in an increase to our Food Service segment operating income of $24.8 million,…
- SFD (SMITHFIELD FOODS, INC.)
- FY2025 10-K: …smf:HogProductionSegmentMember 2024-12-30 2025-12-28 0000091388 us-gaap:OperatingSegmentsMember smf:ExportsMember smf:HogProductionSegmentMember 2024-12-30 2025-12-28 0000091388 us-gaap:OperatingSegmentsMember smf:IndustrialMember smf:HogProductionSegmentMember 2024-12-30 2025-12-28 0000091388…
- FY2025 10-K: …us-gaap:ProductAndServiceOtherMember us-gaap:AllOtherSegmentsMember 2024-01-01 2024-12-29 0000091388 us-gaap:IntersegmentEliminationMember us-gaap:AllOtherSegmentsMember 2024-01-01 2024-12-29 0000091388 us-gaap:OperatingSegmentsMember smf:RetailServicesMember 2024-01-01 2024-12-29 0000091388…
- TSN (TYSON FOODS, INC.)
- FY2025 10-K: …operations such as plant and school cafeterias, convenience stores, hospitals and other vendors. Additionally, sales to the military and a portion of sales to international markets are made through independent brokers and trading companies. As part of our commitment to innovation and growth, we have a subsidiary…
- FY2025 10-K: …facility that shares a facility with and is included in the Prepared Foods segment in the table above. Prepared Foods Our Prepared Foods segment includes processing facilities and a vertically-integrated turkey operation. Our Prepared Foods facilities process fresh and frozen chicken, turkey, beef, pork and other raw…
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Economic-unit decomposition (SOTP): each disclosed business unit is assigned its native valuation basis before any multiple is applied. Operating units are valued on enterprise value; funded financial units are valued on their own common equity, because their borrowings fund earning assets rather than levering the parent. A company total is stated only once every material unit carries a supported value and the parent capital bridge reconciles.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.