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Investing.com - BMO Capital upgraded United Natural Foods (NYSE:UNFI) from Market Perform to Outperform and raised its price target to $36.00 from $25.00. The stock, currently trading at $29.16, has shown remarkable strength with a 77% return over the past year.
The upgrade comes as BMO Capital believes the company is executing its network optimization strategy with better-than-expected customer retention, providing increased visibility into future performance. According to InvestingPro data, UNFI maintains strong liquidity with a current ratio of 1.41, supporting its operational initiatives.
This successful execution gives BMO Capital greater confidence that United Natural Foods can meet or exceed its high-single-digit percentage EBITDA growth targets.
BMO Capital noted that a recent cyber breach is masking strong underlying business momentum at the food distribution company.
The new $36 price target is based on 6.5 times BMO’s revised fiscal 2026 EBITDA estimate of $640 million, which represents 14% year-over-year growth on a reported basis or high-single-digit percentage growth when adjusted for the cyber breach.
In other recent news, United Natural Foods has undergone significant changes in its internal financial reporting structure, reflecting a shift to product-centered divisions. The company now organizes its operations into three segments: Natural, Conventional, and Retail. In terms of financial outlook, United Natural Foods adjusted its fiscal 2025 projections due to a cyber incident, estimating a reduction in net sales by $350 million to $400 million and net income by $50 million to $60 million. Despite this setback, CFRA upgraded the company’s stock rating from Hold to Buy, noting the resolution of the cybersecurity issue and a return to normalized operations.
Jefferies has raised its price target for United Natural Foods to $27, maintaining a Hold rating, and highlighted the company’s progress in debt reduction. UBS also increased its price target to $29, citing stable trends and progress toward financial targets for fiscal year 2027. The company had previously indicated an intention to raise its guidance if not for the cyberattack. These developments reflect United Natural Foods’ ongoing strategic adjustments and market responses.
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