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Investing.com - Mizuho (NYSE:MFG) initiated coverage on Vital Farms (NASDAQ:VITL) with an Outperform rating and a $45.00 price target on Tuesday. The company, currently trading at $38.30, has demonstrated strong financial health with a "GREAT" rating according to InvestingPro analysis.
The research firm identified Vital Farms as the leader in U.S. pasture-raised eggs, positioning the company to benefit from structural growth in protein consumption and premiumization in the eggs category.
Mizuho noted that concerns for animal welfare are driving U.S. egg market conversion to cage-free varieties, but emphasized that only pasture-raised eggs ensure a natural habitat for hens.
The firm’s research suggests many consumers are willing to pay the price premium for pasture-raised eggs, which industry studies indicate have superior nutritional content compared to conventional options.
Mizuho’s $45 price target is based on approximately 17 times their Calendar Year 2026 estimated EBITDA, representing a 10% discount versus Staples growth peers, with potential EBITDA upside through 2027 from farm additions and operating leverage. InvestingPro analysis suggests the stock is currently undervalued, with 12 additional exclusive insights available to subscribers.
In other recent news, Vital Farms has been in the spotlight with several key developments. The company reported mixed first-quarter earnings for 2025, with adjusted EPS surpassing expectations at $0.37, compared to Telsey’s estimate of $0.27 and the FactSet consensus of $0.26. However, sales growth was lower than anticipated at 9.6%, reaching $162.2 million, which fell short of both Telsey’s target of $166 million and the FactSet consensus of $163 million. Despite this, Vital Farms reaffirmed its full-year 2025 guidance, expecting sales growth of at least 22% to reach a minimum of $740 million.
Additionally, DA Davidson adjusted its price target for Vital Farms shares to $44, maintaining a Buy rating, while Telsey Advisory Group reduced its target to $46 from $52, sustaining an Outperform rating. These adjustments follow the company’s proactive pricing strategies and supply management in a challenging market environment. Furthermore, Vital Farms announced the appointment of Freshpet (NASDAQ:FRPT) CEO Billy Cyr to its board of directors, effective July 2025, expanding the board to nine members. Cyr’s extensive experience in consumer packaged goods is expected to be an asset to the company. These developments reflect Vital Farms’ strategic positioning amid ongoing industry challenges and opportunities.
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