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Investing.com - UBS lowered its price target on Freshpet (NASDAQ:FRPT) to $48.00 from $65.00 on Monday, while maintaining a Sell rating on the pet food company’s shares. The company, currently valued at $2.7 billion with a P/E ratio of 79.57, has seen broader analyst targets ranging from $63 to $116.
The price target reduction comes amid concerns about decelerating top-line growth trends, which UBS believes will continue to weigh on the stock. The shares have fallen 62.68% year-to-date, now trading near their 52-week low of $52.27.
UBS noted that while Freshpet’s margin performance has been strong, with revenue growth at 19.3%, the firm believes sustained stabilization in top-line trends is necessary for the shares to perform well going forward. InvestingPro analysis reveals 15+ additional key insights about Freshpet’s financial health and growth prospects.
The investment bank cited several factors supporting its cautious outlook, including worsening velocity declines, household penetration and buy rate trending sideways, no signs of improvement from the broader dog food category, and no discernable net lift yet from incremental club distribution.
UBS’s fiscal year 2026 and 2027 sales estimates for Freshpet are 2% and 5% below Visible Alpha consensus respectively, with the firm also warning that competitive pressure is set to intensify as 2025 comes to a close.
In other recent news, Freshpet reported its second-quarter earnings, revealing stronger-than-expected EBITDA, which was driven by improved margin expansion. However, the company experienced softer sales growth, with revenues reaching $265 million, a 13% increase year-over-year but slightly below the consensus estimate of $268 million. Following the earnings report, Benchmark lowered its price target for Freshpet to $95 from $120, citing macroeconomic concerns, while maintaining a Buy rating. Similarly, Stifel reiterated its Buy rating with a $90 price target, despite Freshpet lowering its 2025 revenue guidance. In contrast, DA Davidson analyst Brian Holland reduced the price target to $101 from $105 but kept a positive Buy recommendation.
JPMorgan assumed coverage on Freshpet with a Neutral rating and a reduced price target of $70, down from $85. The firm highlighted Freshpet’s robust manufacturing footprint and network of company-owned refrigerators as competitive advantages. Meanwhile, TD Cowen adjusted its price target to $63 from $72, maintaining a Hold rating due to slower sequential growth compared to previous years. These developments reflect a mixed outlook among analysts on Freshpet’s future performance.
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