Jefferies downgrades Freshpet stock rating to Hold on slowing growth

Investing.com - Jefferies downgraded Freshpet (NASDAQ:FRPT) from Buy to Hold on Thursday, slashing its price target to $53.00 from $97.00 amid concerns about slowing growth. The stock, currently trading at $49.51, has declined over 66% year-to-date, according to InvestingPro data.

The investment firm cited an "abrupt and persistent slowdown" in Freshpet’s business, coupled with challenging upcoming comparisons for the next nine months and a lack of near-term catalysts to drive performance.

Jefferies noted that household penetration gains have decelerated to 8-9%, down significantly from mid-teens levels observed in January, while velocity has declined in the low single digits.

The downgrade reflects Jefferies’ view that current growth trends of approximately 10% are likely to continue for the foreseeable future, presenting additional risk to the pet food company’s outlook.

Following its revised financial projections, Jefferies concluded that Freshpet’s valuation now aligns with high-growth peers at approximately 11 times FY3 EBITDA, making a Hold rating "appropriate until trends stabilize."

In other recent news, Freshpet announced the departure of Chief Financial Officer Todd Cunfer, who is set to join Campbell Soup Company as their new Executive Vice President and CFO. This move has prompted Freshpet to appoint Ivan Garcia, previously Vice President of Finance, as the interim CFO effective October 17. Garcia has been with Freshpet since 2014 and will serve as the principal financial officer and principal accounting officer on an interim basis. Freshpet has reaffirmed its full-year 2025 guidance despite the leadership change. Benchmark has reiterated a Buy rating on Freshpet with a price target of $80.00, expressing confidence in the company’s future prospects. Meanwhile, DA Davidson maintains a Neutral rating on Campbell Soup , noting Cunfer’s strong track record in financial management. Freshpet will begin the search for a permanent CFO replacement following Cunfer’s departure. These developments reflect ongoing shifts in the leadership teams of both Freshpet and Campbell Soup.

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