The Marzetti Company’s fiscal 2026 year includes an acquisition, Bachan’s, that closed on May 1, 2026. Investing outflow was $470.0M, of which only $77.7M was capital spending, and goodwill rose to $500.5M from $222.8M.
That matters for return on invested capital. The acquisition is fully in the capital base ($1,227.3M, against $837.0M a year earlier) but only two months of it are in operating profit. Reported ROIC is therefore 15.4%, down from 20.84% the year before, and part of that drop is timing. The price implies a sustained return of about 16.3%.
Our economic-profit cross-check at the reported 15.4% gives $97.15 per share if the return persists and $65.34 if excess return fades to the cost of capital over five years; both are below the $104.47 price. The DCF base case is $160.33, and the BUY rests on it, conditional on free cash flow holding near its current level and the acquisition lifting returns back toward the pre-deal level. If returns stay near 15%, the shares are fully valued rather than cheap. The first 10-Q after the 10-K is the first real evidence.
Related notes: The Marzetti Company (MZTI)
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