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On Thursday, Citi research initiated coverage on US Foods Holding Corp . (NYSE:USFD) with a Buy rating, accompanied by a price target set at $95. The firm’s analysis pointed to the company’s strong position in the foodservice sector, highlighting US Foods’ growth in gross profit per case and its ability to effectively manage operating expenses. The company, with its substantial $17.58 billion market capitalization and $38.28 billion in revenue, maintains a strong Buy consensus among analysts, as shown by InvestingPro data.
According to Citi, US Foods has a proven track record of initiatives that support this growth. The analyst expressed confidence in the company’s continued progress, citing there are more phases of growth to anticipate. This optimism is supported by the company’s impressive 39.23% return over the past year, with the stock currently trading near its 52-week high of $78.18. The report also noted US Foods’ leadership in digital innovation within the industry, which is expected to help the company navigate challenges related to price transparency and customer switching costs.
Citi’s optimism about US Foods is partly based on the company’s new digital tools that are believed to enhance salesforce effectiveness and improve the customer experience. The firm suggests that these advancements will provide US Foods with a competitive edge in the market.
The coverage initiation by Citi reflects a positive outlook for US Foods, as the company appears to be well-positioned to continue its growth trajectory. The $95 price target suggests a significant potential upside from the company’s current trading levels.
Investors may view this new coverage as a sign of US Foods’ strong fundamentals and potential for future performance in the foodservice distribution industry. The Buy rating and ambitious price target could influence market sentiment and potentially lead to a positive reaction in the company’s stock price. For deeper insights into US Foods’ valuation and growth prospects, InvestingPro subscribers can access 13 additional expert tips and a comprehensive Pro Research Report, which provides detailed analysis of the company’s financial health and market position.
In other recent news, US Foods Holding Corp has reported its first-quarter earnings for 2025, revealing a 4.5% increase in revenue to $9.4 billion. Despite slightly missing revenue and earnings per share (EPS) forecasts, the company showed a 26% year-over-year growth in adjusted EPS. Analysts from UBS, BMO Capital Markets, and CFRA have all adjusted their price targets for US Foods, with UBS and BMO maintaining positive ratings on the stock, while CFRA continues to hold a Sell rating. UBS raised its price target to $84, while BMO increased it to $85, reflecting confidence in the company’s strategic direction and market share gains. US Foods has demonstrated consistent market share growth in the independent restaurant and healthcare channels, despite challenging conditions in the broader foodservice industry. The company has also reaffirmed its full-year guidance for 2025, projecting strong growth in adjusted EBITDA and EPS. Additionally, US Foods has been recognized for its effective cost efficiency initiatives, which have contributed to its solid financial performance.
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