Citi sets Performance Food stock Buy rating, $121 target

On Thursday, Citi analysts initiated coverage on Performance Food Group (NYSE:PFGC), currently trading at $83.70, with a Buy rating and a price target of $121.00. According to InvestingPro data, the company commands a market capitalization of $13.07 billion and is currently trading above its Fair Value. The new coverage is based on a detailed analysis which suggests that the market may not fully recognize the positive effects of ongoing mix shifts within the company’s operations.

The Citi analyst highlighted two primary factors contributing to Performance Food Group’s potential upside. While InvestingPro data shows current gross profit margins at 12.36% and revenue growth of 7.2% over the last twelve months, the company is working to improve these metrics. The Convenience segment is experiencing beneficial changes, including a decrease in the sales of low-margin nicotine products, a slowdown in lower-margin single-serve packaged food sales, and a notable increase in higher-margin foodservice sales. These shifts are expected to create tailwinds of 30 and 20 basis points, respectively, for the company’s profit and loss statement.

The analysis also points to Performance Food Group’s long-term sales opportunities in foodservice provided to convenience stores. The analyst believes that the growing value gap between convenience stores and traditional fast food outlets—due in part to a less labor-intensive model—favors the former. Furthermore, the analyst is optimistic about the company’s potential for transformative mergers and acquisitions, given its smaller size and regional footprint, which may present additional opportunities for significant growth.

Performance Food Group’s stock is anticipated to benefit from these strategic advantages. The company’s ability to capitalize on the evolving market dynamics, particularly in the foodservice and convenience sectors, is expected to be a driving force behind its financial performance.

The coverage initiation by Citi reflects confidence in Performance Food Group’s business model and market positioning. The $121 price target sets a positive outlook for the company’s stock, suggesting that investors may have yet to fully appreciate the underlying changes and their potential impact on the company’s profitability. With a P/E ratio of 34.46 and an overall financial health score of "GOOD" according to InvestingPro, which offers comprehensive analysis and 10+ additional exclusive insights about PFGC through its Pro Research Reports, investors might want to closely monitor this stock’s potential.

In other recent news, Performance Food Group Co . (PFGC) reported its third-quarter earnings for 2025, missing both earnings per share (EPS) and revenue expectations. The company posted an adjusted EPS of $0.79, falling short of the anticipated $0.89, while revenue was reported at $15.31 billion, slightly below the forecast of $15.35 billion. Despite these setbacks, Performance Food Group achieved a 10.5% increase in net sales for the quarter, driven by a 20% rise in independent restaurant cases. The company has revised its net sales guidance for the fiscal year to a range of $63 billion to $63.5 billion. Performance Food Group is also focusing on expanding its proprietary brands and enhancing its e-commerce platform. Analyst firms such as UBS and Wells Fargo (NYSE:WFC) have been inquiring about the company’s strategies to navigate cost pressures and inflation. The company remains cautiously optimistic about its future performance, with plans to maintain strong growth in various economic scenarios.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.