Truist cuts Freshpet stock price target to $110, maintains Buy

On Monday, Truist Securities updated its assessment of Freshpet stock (NASDAQ:FRPT), currently trading at $81.37, with analyst Bill Chappell reducing the price target to $110 from the previous $140 while still recommending a Buy rating. The adjustment follows a revision of the firm’s financial model, particularly in terms of sales and adjusted EBITDA estimates. According to InvestingPro data, analysts maintain a consensus Buy rating on the stock, with price targets ranging from $96 to $195.

Chappell explained that the revision was necessary to account for the impact of last year’s leap day, which had not been factored into the initial model. This oversight led to changes in the sales forecast for the first quarter of 2025. To keep the full-year 2025 sales projections consistent, the estimates for the remaining quarters of the fiscal year were increased. InvestingPro analysis indicates strong growth potential, with revenue expected to grow by 22% in FY2025, despite the stock trading near its 52-week low of $80.27.

In addition to the sales adjustments, Truist Securities also modified its adjusted EBITDA estimates for Freshpet. The forecast for the first and second quarters of 2025 was lowered, while the projections for the third and fourth quarters were raised. This shift was made to reflect a more front-loaded media spend than previously anticipated. Despite these adjustments, the full-year adjusted EBITDA estimate remains unchanged.

The decision to lower the price target to $110 is attributed to the multiple compression observed across the high-growth Consumer Packaged Goods (CPG) sector. Despite this reduction, Truist Securities maintains its Buy rating on Freshpet shares, signaling continued confidence in the company’s performance.

In other recent news, Freshpet has seen a series of adjustments in analyst price targets and ratings. Citi has reduced its price target for Freshpet from $123 to $96, maintaining a Neutral rating due to concerns over deceleration in growth and uncertainties in consumer buying patterns. Similarly, TD Cowen has lowered its price target from $141 to $115 but kept a Buy rating, citing weakened demand among lower-income customers and distribution challenges. Piper Sandler also adjusted its price target from $160 to $145, maintaining an Overweight rating, and revised sales projections for 2025 and 2026 due to slower growth among lower and middle-income consumers.

Jefferies, on the other hand, has maintained its Buy rating and $150 price target, highlighting the company’s balance of growth and profitability as an attractive investment opportunity. Truist Securities has lowered its price target from $170 to $140, while maintaining a Buy rating, following a Q&A session with Freshpet’s CEO and CFO. This session provided insights into the company’s strategic direction and growth opportunities for the coming years. These recent developments reflect varying levels of confidence among analysts regarding Freshpet’s ability to navigate current challenges and capitalize on future opportunities. Investors will be closely monitoring how the company performs in the coming months in light of these revised expectations.

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