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Investing.com - Guggenheim has reiterated its Buy rating on Performance Food Group (NYSE:PFGC) with a price target of $115.00, citing potential for additional profit gains. The stock, currently trading at $101.86 and near its 52-week high of $103.50, has demonstrated strong momentum with a 36.18% return over the past year, according to InvestingPro data.
The research firm highlighted consistent profit improvement across all segments of the company, noting that further gains could come from procurement efforts, favorable mix shifts, and selective labor productivity initiatives.
Guggenheim pointed to recent 10-K disclosures showing gross margin expansion throughout the enterprise that has more than offset ongoing wage inflation-driven expense pressure, with Convenience segment’s labor productivity-oriented de-leverage being the exception.
The firm emphasized that the 300 basis point gross margin gap versus Foodservice peers presents a significant opportunity for improvement, primarily through stronger procurement efforts, which supports a 10% EBITDA algorithm potentially meriting a higher multiple than the current 10.2x.
Guggenheim maintained its Buy rating amid what it described as a modest pick-up in independent cases, noting that each turn represents $13 in per-share appreciation according to their estimates, suggesting upside to their $115 price target.
In other recent news, Performance Food Group has reported strong financial results for the fourth quarter of fiscal year 2025, surpassing analyst expectations. The company achieved an adjusted earnings per share (EPS) of $1.55, exceeding the projected $1.45, and recorded actual revenue of $16.9 billion, slightly above the expected $16.78 billion. Following these results, several firms have adjusted their outlooks for the company. Truist Securities raised its price target for Performance Food Group to $118 while maintaining a Buy rating, citing the company’s solid guidance for fiscal year 2026. Guggenheim also increased its price target to $115, maintaining a Neutral rating, and noted the company’s decision to reject a merger interest from US Foods. Additionally, Wells Fargo raised its price target to $115, with an Overweight rating, highlighting the company’s strong fourth-quarter results. These developments indicate a positive sentiment among analysts regarding Performance Food Group’s recent performance and future outlook.
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