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Investing.com - Morgan Stanley (NYSE:MS) raised its price target on Vital Farms (NASDAQ:VITL) to $48.00 from $41.00 on Friday, while maintaining an Overweight rating on the specialty egg producer’s stock.
The investment bank cited Vital Farms’ "outsized topline growth opportunity" as being underappreciated by the market, despite recent stock price movements. Morgan Stanley projects a 21% three-year compound annual growth rate for Vital Farms’ revenue from 2025 through 2027.
Following Vital Farms’ second-quarter results, Morgan Stanley increased its fiscal year 2025 and 2026 revenue estimates by 4% and 3%, respectively. The firm also raised its EBITDA estimates for the same periods by 4% and 6%.
The price target increase reflects a 1.5x multiple expansion to 16.5x, which Morgan Stanley indicated aligns with the multiple suggested by its discounted cash flow analysis.
Morgan Stanley attributed the growth potential to shifting consumer preferences toward specialty eggs and egg products, as well as ongoing distribution expansion for Vital Farms’ products.
In other recent news, Vital Farms reported impressive second-quarter 2025 financial results, exceeding expectations on multiple fronts. The company achieved revenue of $185 million, surpassing both BMO Capital’s estimate of $174 million and the consensus forecast of $171 million. Vital Farms also recorded a notable 15% year-over-year volume growth. Furthermore, the company reported adjusted earnings per share of $0.36, which exceeded Telsey Advisory Group’s forecast of $0.27 and the FactSet consensus of $0.28. Sales growth reached 25.4%, with total sales amounting to $184.8 million, surpassing analyst expectations of $170 million. Following these strong results, both BMO Capital and Telsey Advisory Group raised their price targets for Vital Farms to $50, maintaining an Outperform rating. These developments highlight a positive outlook from analysts regarding Vital Farms’ financial performance.
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