UBS raises US Foods stock price target to $84, keeps buy rating

On Friday, UBS analyst Mark Carden increased the price target on US Foods (NYSE:USFD) to $84.00, up from the previous $83.00, while maintaining a Buy rating on the company’s stock. The new target represents potential upside from the current stock price of $71.22, with the company’s market capitalization now reaching $16.4 billion. Carden’s assessment of US Foods’ recent performance highlighted the company’s effective execution amidst a challenging restaurant traffic environment. According to InvestingPro data, management has been showing confidence through aggressive share buybacks, while the stock trades near its 52-week high of $73.19.

US Foods recently reported its first-quarter results, which demonstrated the company’s 16th consecutive quarter of market share growth in the independent restaurant channel, as well as its 18th consecutive quarter of market share gains in the healthcare channel. These consistent gains have been a significant factor in US Foods’ ability to achieve a 4.5% increase in net sales, contributing to a robust revenue growth of 6.32% over the last twelve months. However, InvestingPro analysis indicates the stock is trading at a relatively high P/E ratio of 32x relative to its near-term earnings growth potential.

The company’s focus on cost efficiency initiatives has also been fruitful, leading to a notable 26% year-over-year growth in adjusted earnings per share (EPS). While the company maintains a modest gross profit margin of 17.38%, its overall financial health score from InvestingPro is rated as "GREAT," with particularly strong momentum metrics. Carden’s comments reflected positively on these strategic moves, emphasizing that US Foods’ efforts have borne fruit in the form of solid financial growth.

US Foods has been navigating a difficult landscape where restaurant traffic has been less than favorable. However, their strategic market share expansions and cost-saving measures have allowed them to not only withstand these conditions but also to report substantial growth in key financial metrics.

The price target adjustment by UBS is a reflection of the confidence the firm has in US Foods’ continued growth and operational strategy. The company’s stock is being closely watched by investors as it continues to perform robustly in a competitive and challenging market.

In other recent news, US Foods Holding Corp reported its first-quarter earnings for 2025, revealing an adjusted earnings per share (EPS) of $0.68, which was slightly below the forecast of $0.70. The company’s revenue reached $9.4 billion, narrowly missing the forecast of $9.42 billion, but still represented a 4.5% increase year-over-year. Despite these minor misses, US Foods reaffirmed its full-year guidance, projecting robust growth in adjusted EBITDA and EPS for 2025.

BMO Capital Markets responded to these results by raising the price target for US Foods to $85 from $80, maintaining an Outperform rating, due to the company’s strong EBITDA growth and strategic initiatives. In contrast, CFRA adjusted its price target to $59 from $58 but maintained a Sell rating, citing potential risks related to consumer sentiment and discretionary spending. Analysts at BMO Capital expressed confidence in US Foods’ ability to navigate challenging business climates, while CFRA remained cautious about the company’s outlook.

US Foods also reported success in expanding its customer base, with April marking its strongest month in 2021 for acquiring new customers and accounts. The company continues to focus on strategic growth investments and operational improvements, which have contributed to its resilience in a challenging macroeconomic environment.

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