JBT Marel

Phase A — Understand the business

Lens 1 · Company Overview

JBT Marel designs, builds, and services capital equipment for the food & beverage processing industry — the machines that turn live poultry, hogs, fish, and produce into packaged food. It is the product of the January 2, 2025 combination of John Bean Technologies (JBT, US, NYSE) and Marel hf. (Iceland, the global protein-processing leader). JBT renamed to "JBT Marel Corporation" and trades as JBTM on the NYSE with a secondary listing on Nasdaq Iceland.

The model is razor-and-blade. JBT Marel sells big, customized, fixed-price processing lines (the "razor"), then earns durable aftermarket revenue — parts, service, rebuilds, equipment-leases, AXIN/PRoCARE software subscriptions — off a very large installed base (the "blade"). Recurring revenue was 50% of total in 2025. New-equipment sales use the cost-to-cost over-time method ($1,644.6M recognized this way in 2025) — i.e., percentage-of-completion on long-cycle contracts.

• Products/services: primary processing (live-bird handling, stunning, evisceration, chilling), secondary (portioning, slicing, injecting, x-ray inspection, aseptic fillers/sterilizers), further processing (cookers, spiral freezers, high-pressure processing), plus packaging, AGV/warehouse-automation robots, and the AXIN software/AI-analytics layer.
• Customers: multinational + regional food & beverage producers across poultry, beef, pork, seafood, ready-meals, fruit/veg, dairy, bakery, pet food, beverages, and pharma/nutraceutical. No single customer >10% of revenue in any of the last three years — broad, fragmented end-customer base.
• Contract structure: fixed-price long-cycle equipment contracts plus recurring aftermarket. Customer advance/progress payments are a structural feature — the food-machinery model collects deposits before build, so it is "less working-capital intensive than many other industrial capital goods industries." Contract liabilities (advances) were $539M at Q1-2026 vs $142M contract assets.
• Scale: ~11,500 employees (~27% US), >50 manufacturing/distribution sites, ops in >30 countries, 17 technical centers, ~2,880 issued patents.
• Strategy ("NextGen", introduced early 2026): four pillars — Customer-First Service org; Integrated Value Proposition (full-line cross-sell); Capture Full Market Potential; Operational Distinctiveness (continuous improvement / margin).

Lens 2 · Supply Chain

Upstream inputs → JBT Marel → end customer:

• Upstream (inputs): carbon steel, stainless steel, aluminum, steel castings/forgings, sheet metal, plus electronics/controls and motors. Sourced "both domestically and internationally"; the company explicitly states it does not single-source the majority of raw materials and runs supply-base consolidation, make-vs-buy, value-engineering, and best-cost-country sourcing. This is a deliberate de-risking of the input side — steel is a commodity with many sellers.
• The company (transformation): >50 plants in the US (AR, CA, FL, GA, KS, NY, NC, OH, PA, VA, WI), Brazil, Belgium, China, Denmark, Germany, Iceland, India, Italy, Slovakia, Spain, Sweden, the Netherlands, and the UK.
• Downstream (end customers, named industries): the largest pull is poultry (the segment management repeatedly calls out as "robust" / "strong commercial momentum"), then meat (beef/pork), seafood, and fruit & vegetable; plus beverages, ready-meals, pet food, dairy, bakery, and pharma. End-customer archetypes are the global protein majors — Tyson, JBS/Pilgrim's, Cargill, BRF, and regional processors — though no single one is >10% of revenue ].
• Chokepoints / single-source dependencies: the disclosed forward-looking risk set names "supply chain delays and reduced material or component availability" and "increases in energy, raw material, freight, and labor costs". Tariffs are the live chokepoint in 2026 — gross margin was explicitly dinged by "higher tariff costs" in both Q1-2026 and FY2025, and management is "closely monitoring how rising inflation may impact the price-cost dynamics". No single-source raw-material dependency is flagged as material.

The supply chain is commoditized on the input side and concentrated by industry (protein) on the output side. The pricing power problem is not input scarcity — it is passing tariff/steel cost through fixed-price contracts during high inflation.

Lens 3 · Competitive Advantages (moats)

Installed base + aftermarket lock-in is the primary moat. A processing line is mission-critical, runs continuously, and is expensive to switch; once JBT Marel equipment is on the floor, the parts/service/rebuild annuity (50% of revenue) follows for the equipment's multi-decade life. Switching suppliers means re-validating food-safety-critical kit. This is the classic industrial-installed-base moat — and the merger roughly doubled the base.

Scale + full-line breadth. Post-merger, JBT Marel is the only player able to offer a near-complete protein line "from the initial point of entry of raw products through further processing and end-of-line packaging," globally, with local service in every major region. Management positions "ability to provide comprehensive sales and service in all major regions... by maintaining local personnel in region" as the differentiator vs. regional point-solution rivals.

Market-structure power. The food-processing-equipment market is fragmented — top players (GEA, Bühler, Marel) together hold only ~25-30%. Post-merger JBTM is the clear #1 (legacy Marel ~4.1% + legacy JBT ~2.1% ≈ ~6%+ combined share): simple sum of the two cited shares — actual combined share likely higher given overlap removal]. In a fragmented market the #1 with the broadest line and the largest service network has real bargaining power over the long tail of regional competitors.

IP: ~2,880 patents + ~781 pending, ~1,172 trademark registrations — meaningful but the company itself says no single patent group is material. IP is a fence, not the moat.

Bargaining power:

• Over suppliers: HIGH — steel/components are commoditized, multi-sourced, and JBTM buys at scale.
• Over customers: MODERATE-HIGH on aftermarket (locked-in installed base, mission-critical uptime), but MODERATE on new equipment — these are sophisticated industrial buyers running competitive RFQs on big fixed-price projects, and the 2026 tariff pass-through friction shows pricing is not unilateral.

Durability verdict: the moat is real and structural (installed base + service network + scale in a fragmented market), the kind that compounds. The risk is not erosion by a competitor — it is self-inflicted (integration execution, controls) and cyclical (protein-capex timing).

Lens 4 · Segments

Effective Q4-2025 the company realigned into two reportable segments (replacing the interim "JBT" / "Marel" split): Protein Solutions and Prepared Food & Beverage Solutions. The CODM (CEO Brian Deck) manages on segment Adjusted EBITDA.

FY2025 (recast) by segment:

(Note: segment Adj EBITDA sums to $703.4M before unallocated corporate; consolidated Adj EBITDA was $600.4M.) The recast makes YoY segment comparison nearly meaningless — Protein Solutions "grew" 917% only because legacy JBT had almost no protein-primary business and Marel (which IS protein-primary) landed entirely in this segment in 2025. The honest read is pro-forma, not YoY.

Q1-2026 by segment:

The trend that matters: Protein is accelerating and margin-expanding (+520bps to 21.7%), driven by organic poultry recovery + FX + synergies. Prepared Food & Beverage is stalling — revenue flat (organic down, masked by $21M FX), margin contracting 170bps on lower volume + tariffs. The combined-company growth story in early 2026 is a one-legged stool: poultry/protein is carrying it while the broader prepared-foods book is soft.

Geography (Q1-2026, end-customer region):

Post-Marel, JBTM is more European than American (EMEA 45% vs N.America 38%) — a structural shift from legacy JBT, and the reason it carries a Nasdaq Iceland listing and a Euro-denominated debt hedge book.

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Phase B — Measure performance

Lens 5 · Earnings Result (Q1-2026, reported ~early May 2026)

The print (Q1 ended March 31, 2026):

• Vs consensus: revenue $936M beat ~$923.6M (+1.3%); adjusted EBITDA $142M beat ~$135.5M (+4.8%); adjusted EPS $1.58 beat ~$1.48 (+6.8%). Clean beat across the board.
• What drove it: revenue +$82M = only +$30M organic, +$52M was FX tailwind (weak USD vs EUR). Bottom-line jump was mostly lower bad stuff — Q1-2025 carried a $147M pension-settlement charge and $74M M&A costs that did not repeat — plus margin/synergy gains and a $31M interest-expense drop.
• Margin moves: gross margin +90bps (revenue + synergies, partly offset by higher tariffs); SG&A down $64M (−1,020bps as % of revenue) on the 2025 integration restructuring + lower M&A.
• Segments: Protein carried it (+21.7% rev, +520bps margin); Prepared F&B was flat-to-soft (see Lens 4).
• Guidance (FY2026, reaffirmed): revenue $3.99–4.07B, adj EBITDA margin 17.0–17.5%, GAAP diluted EPS $4.70–5.15, adjusted EPS $8.00–8.50, net-income margin 6.1–6.6%. Midpoint implies ~6% revenue growth, ~145bps margin expansion, and ~29% adjusted-EPS growth — a margin-expansion + deleveraging story, not a volume-boom story.
• Balance-sheet flags: leverage fell to ~2.6x at Q1-2026, from ~2.9x at YE2025; FCF ~$100M in Q1 (operating cash flow $119M − $26M capex + small disposals, per the cash-flow statement ). Inventories $667M (up from $644M) and receivables $438M are in line with revenue; advance payments rose to $561M (healthy — customers pre-paying). Goodwill $3,393M + intangibles $2,052M = $5,445M, 67% of $8,163M total assets — the Marel PPA dominates the balance sheet.
• Market reaction: "stock soars" / "stock soared" on the print — the beat + reaffirmed guide + falling leverage was taken well. But note the stock is still ~17% below its March high (see Lens 8).
• Unusual vs own history: the Q1-2025 comp is distorted by the deal-close (pension settlement, M&A costs, the entire Marel revenue base arriving). The cleanest signal is organic revenue +$30M (~3.5%) — modest — and the margin trajectory, which is genuinely improving.

Lens 6 · Earnings Calls (sentiment trend)

No transcripts on the research shelf (transcripts=0), so this is ``-grounded on the Q1-2026 call coverage + the March Investor Day.

• Management's stated focus (Q1-2026 call): "robust" orders from global poultry customers; "healthy demand" from meat and fruit/veg; synergy realization and margin expansion; and a newly explicit watch item — "price-cost dynamics" under rising inflation/tariffs.
• Tone shift over time (FY2025 10-K → Q1-2026 → Investor Day): the narrative has migrated from "close the deal / integrate" (2024-25, dominated by M&A costs, pension settlement, restructuring) to "NextGen / organic growth + margin + deleverage" (early 2026). The 2025 10-K outlook talks about "backlog conversion and healthy demand"; by the March 2026 Investor Day management is confident enough to put 2028 financial targets on the table (Lens 11). That is a tone of a team that believes the integration risk is behind it.
• Recurring phrases: "transform the future of food," "synergies," "recurring revenue ~50%," "backlog conversion," "margin expansion."
• What they stopped saying: the heavy "two segments: JBT and Marel / integration cost" framing of 2025 — replaced by the realigned Protein / Prepared-Food segments and the NextGen pillars. The disappearance of M&A-cost and pension-charge language is itself the signal that the deal-noise quarter is over.
• Sentiment read: improving and increasingly confident, but with one honest hedge management keeps inserting — tariffs/inflation on the price-cost line. They are not pretending it isn't there.

Lens 7 · Comps

JBTM has no clean single peer (Marel was the closest and JBTM now is it). The relevant comp set is global food/industrial-processing-equipment makers.

Read:

• On trailing P/E (~39x) JBTM looks expensive — but that is a near-zero GAAP-EPS denominator (FY2025 GAAP diluted EPS was negative $(0.96); the trailing number reflects a depressed E inflated by deal/pension noise). The forward adjusted multiple (~15.5x) is the honest lens and is broadly in line with GEA (~10-13x) and below Alfa Laval (~24x).
• On EV/EBITDA, JBTM at ~11-13x sits between cheap GEA (~10x) and premium Alfa Laval (~15x) — reasonable for the #1 in a fragmented market mid-integration.
• A live read-across is coming: Middleby spins its food-processing arm ("Midera," ~$850M 2025 revenue, "industry-leading EBITDA margins") onto Nasdaq ~July 6, 2026 as MFP. That will print a fresh pure-play food-processing-equipment multiple and is the single best forward comp for re-rating JBTM. Worth tracking.
• Most peer multiples could not be sourced to a clean date; those are honestly marked n/a rather than fabricated.

Lens 8 · Stock-Price Catalysts (>5% moves, last ~5 years)

Mostly ``. JBTM's history is bifurcated: legacy JBT (a steady industrial) and the post-merger JBTM (a re-rating special situation).

• Aug 2023 — AeroTech divestiture closes (sold to Oshkosh; $453.3M after-tax gain). Repositioned JBT as a pure-play food-tech and put a cash war-chest toward the eventual Marel bid.
• 2024 — the Marel takeover saga. Offer announced (Jan 2024), repeatedly extended for regulatory review, EU Phase-1 clearance Nov 26 2024, Australia non-opposition Nov 22 2024, settlement Dec 20 2024. A long deal-pending overhang.
• Jan 2, 2025 — merger closes; rebrands JBTM; dual NYSE/Nasdaq-Iceland listing begins.
• Feb/Mar 2026 — Q4-2025 print beats; 2026 guide for growth + margin + synergies → shares reacted up.
• ~Early March 2026 — local high ~$151 (CEO Brian Deck sold 18,634 shares at ~$150.98 on Mar 3).
• Mar 26, 2026 — Investor Day; 2028 targets unveiled (5-7% organic CAGR, ~20% adj EBITDA margin) — a framing catalyst.
• ~Early May 2026 — Q1-2026 print beats; "stock soars".
• By June 12, 2026 — ~$125, i.e. ~17% below the March high despite the Q1 beat.

Pattern — what the market actually trades on: (1) deal/integration milestones (close, synergy proof, Investor-Day targets) and (2) earnings beats + guidance. The recent ~17% drawdown from the March high into a beating Q1 suggests the move is being driven by multiple compression (small-cap industrial, rate/macro, tariff worry) rather than by the operating story — the fundamentals printed up while the stock came in. That gap is the setup the position seed leans on.

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Phase C — Judge people & books

Lens 9 · Management

• Brian A. Deck — CEO (since Dec 2020), age 57. Former JBT CFO (2014-2020) who stepped up to CEO. Track record: executed the AeroTech divestiture (cleaned the portfolio to pure-play food-tech, $453M gain) and then the transformational, multi-year, regulatorily-complex Marel acquisition — the defining capital-allocation move of his tenure. A finance-trained operator running an integration-and-deleverage playbook, which fits the moment ].
• Matthew J. Meister — EVP & CFO (since Dec 2020), age 47. Internal promotion (joined JBT 2019 as Protein-division CFO). The Deck/Meister pairing has been intact ~5.5 years — continuity through the largest deal in company history.
• Arni Sigurdsson — President, age 42. The Marel side. Former Marel CEO (from Dec 2023), long Marel tenure (joined 2014, Head of Strategy → CSO → Deputy CEO). His elevation to President of the combined company is the explicit signal that this is a merger, not an absorption — Marel leadership is in the C-suite, not exited. Good for retention/culture; worth watching for two-headquarters / two-culture friction (the 10-K flags "inclusion and belonging across two legacy companies").
• Skin in the game: Brian Deck owns 0.25% ($16.8M) of the company. He sold 18,634 shares (~$2.8M) on Mar 3, 2026 at ~$151 — i.e., near the local top. One insider sale near a high is a yellow, not a red, flag (could be 10b5-1 / diversification), but it is worth noting the CEO trimmed into strength right before a ~17% drawdown.
• Capital-allocation history: divest non-core (AeroTech) → acquire the strategic prize (Marel) → now deleverage (target 2.0-2.5x from 2.9x) + synergy-harvest ($150M run-rate by end-2027) + offset dilution with buybacks. No active buyback program currently and only a token dividend (~$5M/quarter) — capital is going to debt paydown first, which is the right call at ~2.6x ]. The framework set at Investor Day is disciplined: M&A only at "double-digit cash ROIC within 3-5 years" and EPS-accretive within 1 year.
• Red flags: (1) the CEO sale near the high; (2) the share count jumped from ~32M (2023) to ~52M (2025) — the Marel deal was partly equity-funded, materially diluting legacy JBT holders; (3) the open question of whether the synergy/margin targets are management-credible or management-promotional (see Lens 12). No related-party or comp-abuse flags surfaced.
• Archetype: professional managers, not founders — a finance-led integration team. Right archetype for a deleveraging post-merger industrial; the risk is they're optimizing a cost story rather than building a growth one.

Lens 10 · Forensic Red Flags

Acting as a forensic equity analyst. This is the lens with the most to say on JBTM, because a $4.2B acquisition just landed on the balance sheet.

THE central red flag — two unremediated material weaknesses in Marel's ICFR. The FY2025 10-K (and PwC's audit opinion) disclose that Marel's management identified two material weaknesses that remained unremediated as of Dec 31, 2025:

1. IT general controls — Marel did not design/maintain effective ITGCs (program-change management, user-access/segregation-of-duties, computer-operations, program-development controls).
2. Journal entries — Marel did not maintain effective controls over recording/review of journal entries; "certain key accounting personnel have the ability to prepare and post journal entries without an appropriately designed independent review."

Neither has yet caused a material misstatement, per management. But PwC and management excluded Marel entirely from the 2025 ICFR audit (permitted in a year-of-acquisition), and Marel is ~17% of total assets and ~53% of total revenue. So a majority of revenue currently sits inside a control environment with two open material weaknesses and no auditor opinion on its internal controls. This is the single biggest reason to hold conviction below HIGH. Remediation is the must-track catalyst.

Critical Audit Matters (PwC) — where the judgment risk is concentrated:

• Marel purchase-price allocation: $1,160M customer relationships, $230M trademarks, $370M acquired technology — valued with multi-period-excess-earnings and relief-from-royalty methods on management's assumptions (revenue growth, EBITDA margins, discount/attrition/royalty rates). Aggressive assumptions here flatter future earnings (lower amortization) and defer impairment risk. Goodwill alone is $3,393M.
• Cost-to-cost revenue recognition: $1,644.6M recognized over-time on estimated-cost-at-completion judgments. Percentage-of-completion is the classic locus of earnings-management risk (under-estimate costs → pull revenue forward). Worth watching contract-asset growth vs revenue: contract assets rose to $142M from $119M QoQ — in line, not a flag yet.

Cash flow vs earnings: healthy and cleaner than the GAAP optics. FY2025 GAAP was a $(50.5)M net loss, but operating cash flow from continuing ops was +$341.7M and FCF +$249.8M — the loss was non-cash/one-time (pension settlement $147M, M&A costs, acquisition amortization $179M). Q1-2026 OCF $119M vs net income $45M — D&A ($68M) and advance payments ($50M) drive the gap; benign. Earnings quality is actually understated by GAAP, not overstated — the adjustments back out genuinely non-recurring items.

SBC: modest — $7M in Q1-2026, $5M Q1-2025; not flattering non-GAAP materially.

Leverage / debt structure: $1,910M total debt at YE2025; $411M short-term (the 2026 Convertible Notes come due) + $1,432M long-term (Term Loan B + 2030 Convertible Notes). Secured-leverage covenant stepped down from 5.0x to 4.0x on Jan 2, 2026 — they're inside it at ~2.6x, but the step-downs are a discipline forcing deleveraging. Extensive cross-currency-swap book ($2B net-investment hedges + $693M fair-value hedges) to manage the Euro exposure — adds derivative complexity ($109M derivative liabilities at Q1-2026) but is hedging, not speculation.

Regulatory findings (required sub-section):

• SEC Litigation Releases / AAERs: None. Verified via SEC EDGAR EFTS (LR + AAER) for 2021-06-18 → 2026-06-18 — total_sec_findings: 0.
• Non-SEC enforcement (FTC/DOJ/EU/etc.): No material enforcement actions, fines, or consent decrees found. The only regulatory event is the merger clearance itself — EU Commission Phase-1 clearance (Nov 26, 2024) "would not raise competition concerns," Australia ACCC non-opposition (Nov 22, 2024); no DOJ/FTC challenge. Russia/Belarus subsidiary sanctions-compliance is flagged as a risk but no action disclosed.
• 10-K Item 3 (Legal Proceedings): "ordinary course" only — management does not believe any proceeding, individually or in aggregate, will be material.
• Net: clean on enforcement/litigation; the forensic risk is entirely internal-controls + acquisition-accounting, not legal.

(Lens 10 summary verdict) The books are clean of fraud signals and the cash generation is real and arguably better than GAAP suggests — but the unremediated Marel control weaknesses over a 53%-of-revenue subsidiary are a genuine, named, auditor-flagged risk that caps conviction until remediated.

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Phase D — Project & stress-test

Lens 11 · Forward Projection

Built bottom-up from FY2025 actuals + management's reaffirmed FY2026 guide + the March-2026 Investor-Day 2028 targets. Fiscal year = calendar year (Dec 31).

Anchors:

• FY2025 adjusted diluted EPS (continuing ops): $6.41
• FY2025 revenue $3,798.2M; adj EBITDA $600.4M (15.8% margin); FCF $249.8M
• FY2026 guide: revenue $3.99–4.07B; adj EBITDA margin 17.0–17.5%; adjusted EPS $8.00–8.50
• 2028 targets: 5-7% organic revenue CAGR (2025-28); ~20% adj EBITDA margin; ~$150M run-rate synergies by end-2027; FCF conversion 55-60% of adj EBITDA; deleverage to 2.0-2.5x

Adjusted diluted EPS path (continuing ops):

Input lines (Base): organic revenue +5-6%/yr + ~$50-80M residual FX; adj EBITDA margin 17.25% (2026) → ~18.5% (2027) → ~19.5-20% (2028) as the ~$150M synergies fully land and volume leverage builds; interest expense falling as Term Loan B / 2026 Notes are repaid from FCF; share count roughly flat-to-down (buybacks "to offset dilution") on ~52M base.

Sanity check vs price: at ~$125, FY2026 base adj EPS $8.25 ⇒ ~15.2x forward; FY2027 base $9.30 ⇒ ~13.4x; FY2028 base $10.30 ⇒ ~12.1x. For the de-levering #1 in a fragmented, defensive (food) end-market growing low-single-digits organically with a 50%-recurring base, low-teens forward EBITDA/EPS multiples are undemanding — the math is the spine of the bull case. The bear case isn't that the multiple is too high; it's that the EPS bridge (synergies + margin to 20%) doesn't fully arrive.

(Per --watchlist rules, no Brier forecast.ts create logged in this loop. If promoted to a thesis, the loggable base call would be: "JBTM FY2026 adjusted diluted EPS ≥ $8.25," resolves 2026-12-31.)

Lens 12 · Bull vs Bear

Bull case. JBTM is the undisputed global #1 in food-processing equipment — a fragmented, defensive, structurally-growing market (protein demand + automation + food-safety + labor-replacement) — that just doubled its installed base and now harvests a 50%-recurring annuity off it. The thesis is self-help, not market-dependent: ~$150M of synergies still to land, a clear path from 15.8% → 20% adj EBITDA margin by 2028, ~29% adjusted-EPS growth guided for 2026 alone, and deleveraging from ~2.6x to 2.0-2.5x that converts EV growth into equity growth. At ~15x forward / ~12x on 2028, you're paying an unremarkable multiple for the #1 with a credible internal margin story. The Middleby food-processing spin (~July 2026) could re-rate the whole sub-sector. Potential surprise: synergies over-deliver and the protein up-cycle (poultry capex) runs hotter than guided.

Bear case (2-3 things that could permanently impair):

1. Integration / controls failure. Two unremediated material weaknesses sit over 53% of revenue. A delayed remediation, a restatement, or a covenant/reporting stumble would torch the "competent integrators" narrative and the multiple with it — this is the one that could do lasting damage, because it's a credibility (not cyclical) risk.
2. Margin-bridge doesn't arrive. The entire EPS story leans on getting to ~20% margin. Tariffs/inflation on the price-cost line are already compressing gross margin in 2026 (management's own flagged hedge), and the Prepared-Food & Beverage segment is shrinking organically with contracting margins. If tariffs persist and Prepared-Food stays soft, 2028 margin stalls at ~17-18% and the EPS bridge breaks.
3. Cyclical protein-capex air-pocket. New-equipment demand (~50% of revenue) is lumpy capital spending by protein producers, sensitive to their margins, avian-influenza disruptions, and rates. A poultry-capex downturn would hit the half of the book that isn't recurring.

Pre-mortem (it's Dec 2027, the thesis broke — what happened?): Tariffs stuck around and JBTM couldn't fully pass them through fixed-price contracts; gross margin stalled ~17%. Prepared-Food & Beverage kept shrinking. Synergies came in at ~$100M not $150M, and one of the Marel material weaknesses triggered a restatement of a prior period, spooking the credit market just as the 2026 Notes were refinanced. The stock de-rated to ~10x on a stalled ~$8.50 EPS — i.e., back toward the $118 low.

Are multiples too high? No — ~15x forward / ~12x on 2028 is below defensive-industrial norms and below Alfa Laval (~24x). The risk is to the E, not the multiple.

Contrarian view (what the market is refusing to see): the market is treating JBTM as a small-cap industrial cyclical (hence the ~17% drawdown into a beat) and under-weighting that half the revenue is a recurring, defensive food-aftermarket annuity that doesn't behave like a cyclical at all. If the integration de-risks and the recurring mix is recognized, JBTM deserves a defensive-compounder multiple, not a cyclical one.

Lens 13 · Devil's Advocate (short-seller)

Dismantling the bull case.

• The "synergy + 20% margin" story is a management promise, not a delivered result — and management is a finance-led team with every incentive (comp tied to ROIC + adj EPS) to frame it optimistically. The CEO sold near the March high. Adjusted EPS ($6.41 → guided $8.00-8.50) is doing enormous work; GAAP diluted EPS was negative in 2025 and the gap is $179M of acquisition amortization that is real economic cost of the assets they bought.
• Revenue is barely growing organically. Strip FX and the deal: Q1-2026 organic revenue was +$30M (~3.5%); FY2025 organic was +$39.8M (~2.3%). The headline "+121% revenue" and "+9.6% Q1" are acquisition + currency, not demand. You're paying a re-rating multiple for a low-single-digit organic grower.
• Half the business is decelerating now. Prepared Food & Beverage (55% of revenue) had flat-to-down organic revenue and contracting margins in Q1-2026. The growth is concentrated entirely in poultry/protein — a single, cyclical end-market.
• The balance sheet is a goodwill tower. $5.45B of goodwill+intangibles is 67% of assets and ~122% of equity ($4.48B). If the protein cycle turns or the margin targets miss, the customer-relationship/trademark intangibles (valued on aggressive PPA assumptions) are impairment candidates — a non-cash but confidence-destroying event.
• Most dangerous competitor bulls underrate: the Middleby food-processing spin (Midera/MFP) — a focused, "industry-leading-margin" pure-play with $850M revenue, newly unencumbered and incentivized, landing on Nasdaq right as JBTM is mid-integration and distracted. A nimble, motivated #2 attacking while #1 digests a merger is the classic share-shift setup.
• Controls. Repeating because it matters: 53% of revenue, two open material weaknesses, no auditor ICFR opinion on it. A short doesn't need a fraud — just a remediation delay or a restatement headline.
• What must hold for ~$125: that synergies fully land, margin reaches ~20% by 2028, tariffs get passed through, the protein cycle stays up, AND the Marel controls get cleanly remediated. That's a lot of "ANDs."
• If growth disappoints 20-30%: if FY2027 adj EPS lands ~$8.20 (bear) instead of ~$9.30 (base), and the multiple compresses to ~12x on cyclical fear, that's ~$98 — roughly the analyst low ($118) and below. Downside is real.
• Single permanent-impairment scenario: a Marel restatement during the 2026-Notes refinancing window → credit-market loss of confidence → forced equity raise at a depressed price. Plausibility: low-to-moderate, but non-trivial given the open material weaknesses.

Lens 14 · Management Questions (ordered by information value)

1. Marel material weaknesses: what is the specific remediation timeline for the two ICFR material weaknesses, and when will the auditor be able to opine on Marel's internal controls? What's the risk of a prior-period restatement?
2. The 2028 ~20% adjusted-EBITDA-margin target: bridge it for us from today's 17.25% — how much is synergies, how much volume leverage, how much price, and what's the tariff/price-cost assumption embedded?
3. Prepared Food & Beverage organic revenue was flat-to-down with contracting margins in Q1-2026 — is this end-market softness or share loss, and what specifically reverses it?
4. How much of the ~$150M synergy target is realized in run-rate today vs still to come, and what's the hardest remaining bucket to capture?
5. On tariffs: what % of your cost base is exposed, and contractually, how much can you pass through on fixed-price backlog before it hits gross margin?
6. Capital allocation post-deleveraging (once you hit 2.0-2.5x): buybacks, dividend growth, or a return to M&A — and at ~$125, is your own stock the best use of cash?
7. The 2026 Convertible Notes mature this year — what's the refinancing plan, and how do you think about the convertible-hedge/warrant unwind?
8. Organic revenue growth was ~2-3.5% recently vs the 5-7% CAGR target — what accelerates organic specifically, and over what timeframe?
9. What is the current order book / book-to-bill by segment, and what does poultry-customer capex look like into 2027 (avian-influenza, producer margins)?
10. Two headquarters (Chicago + Gardabaer), two legacy cultures, a Marel President — how are you measuring integration/retention success, and where is friction showing up?
11. AXIN / digital / AI-analytics: what's the attach rate and revenue contribution today, and is software a real margin lever or a feature?
12. The recurring 50% revenue mix — what's its organic growth rate and gross margin vs new-equipment, and can you push the mix higher?
13. FX is currently a tailwind (weak USD); how exposed is reported EPS to a USD reversal, and how does the cross-currency-swap book behave if that happens?
14. ROIC target ("double-digit by 2028"): what's the current ROIC including the full Marel goodwill/intangibles, and what's the path?
15. Insider selling near the March high — how should investors read management's own conviction at current levels?

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