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On Friday, CFRA analyst Arun Sundaram increased the price target for US Foods Holding Corp (NYSE:USFD) to $59 from the previous $58, while keeping a Sell rating on the stock. The company, currently trading at $71.81 and commanding a market cap of $16.55 billion, is trading near its 52-week high of $73.19. Sundaram’s revision reflects a 16x multiple on the updated 2025 earnings per share (EPS) estimate of $3.69, a slight increase from the earlier forecast of $3.63. The 2026 EPS estimate was also adjusted upward to $4.13 from $4.12. According to InvestingPro data, the stock appears slightly overvalued at current levels.
Despite US Foods’ first-quarter results falling short of expectations, the company’s stock has been trending upward due to investor optimism that the company may have passed the most challenging period. With revenue growth of 6.32% and trailing twelve-month revenue of $38.28 billion, the company maintains strong market presence. The broader foodservice industry experienced a particularly weak start to the year in January and February, largely due to adverse weather conditions. Restaurant foot traffic has been under pressure over the past year, but there are signs of improvement since February, with the positive trend extending into early May.
US Foods has also reported success in expanding its customer base, citing April as its strongest month yet in 2021 for acquiring new customers and accounts. This growth in new business is a bright spot for the company amid the broader industry challenges. InvestingPro analysis reveals 10+ additional insights about US Foods’ performance and outlook, available in the comprehensive Pro Research Report.
However, Sundaram cautions that there are still risks to the company’s outlook and consensus estimates, which may not fully account for the potential decline in consumer sentiment and anticipated reductions in consumer discretionary spending. This caution is supported by InvestingPro data showing five analysts revising their earnings downward for the upcoming period. In light of these concerns, CFRA maintains its Sell rating on US Foods stock.
In other recent news, US Foods Holding Corp. reported its first-quarter 2025 earnings, revealing adjusted earnings per share (EPS) of $0.68, which was slightly below the forecasted $0.70. The company’s revenue reached $9.4 billion, narrowly missing the forecast of $9.42 billion but still marking a 4.5% increase year-over-year. Despite these minor shortfalls, the company reaffirmed its full-year guidance for 2025, projecting adjusted EBITDA growth of 8-12% and adjusted EPS growth of 17-23%. In addition to its financial performance, US Foods announced a new $1 billion share repurchase program, building on previous buybacks. The company’s strategic initiatives continue to gain traction, with notable growth in its private label segment and a 1.1% increase in case volume. Furthermore, S&P recently upgraded US Foods’ corporate credit rating to BB+, citing improvements in financial performance. These developments reflect the company’s ongoing efforts to strengthen its market position and enhance shareholder value.
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