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Investing.com - UBS raised its price target on United Natural Foods (NYSE:UNFI) to $29.00 from $26.00 while maintaining a Neutral rating. The stock, currently trading at $27.21, has shown significant momentum with a 9.92% gain over the past week. According to InvestingPro analysis, UNFI appears to be trading near its Fair Value, with 12 additional real-time insights available to subscribers.
The food distributor’s updated fiscal year 2025 outlook indicates stable underlying trends and continued progress toward its fiscal year 2027 financial targets, according to UBS. The company had previously indicated it would have raised guidance if not for a recent cyberattack. With current revenue of $32.24 billion and a healthy current ratio of 1.41, UNFI maintains strong operational fundamentals despite challenges.
UBS noted that United Natural Foods has not lost any customers due to the cyber incident, with negative financial impacts expected to be largely contained to its fourth quarter. The company’s cybersecurity insurance policy is anticipated to cover all recovery and remediation costs, with reimbursement likely occurring in fiscal year 2026.
The updated fiscal year 2025 guidance raised the midpoint of United Natural Foods’ sales outlook to $31.7 billion from $31.5 billion, while reducing profit metrics including adjusted EBITDA. Despite an expected sales loss of $350 million to $400 million from the cyberattack, the revised outlook suggests better-than-expected underlying sales growth.
UBS believes the sales strength was likely driven by continued momentum in the company’s Natural segment. While the company faces some headwinds with a gross margin of 13.36%, InvestingPro data indicates net income is expected to grow this year. Access the comprehensive Pro Research Report for detailed analysis of UNFI’s financial health and growth prospects.
In other recent news, United Natural Foods has revised its fiscal 2025 outlook in light of a previously disclosed cyber incident. The company anticipates a reduction in net sales by $350 million to $400 million and a decrease in net income by $50 million to $60 million. Despite these challenges, United Natural Foods has updated its full-year net sales forecast to between $31.6 billion and $31.8 billion, an increase from the prior range. The adjusted earnings per share guidance has been lowered to $0.40 to $0.80, down from the previous $0.70 to $0.90 range. CFRA has upgraded United Natural Foods’ stock from Hold to Buy, citing limited financial impact from the cybersecurity issue and a return to more normalized operations. Meanwhile, UBS has adjusted its price target for the company to $26.00, maintaining a Neutral rating, due to uncertainties introduced by the cyber attack. The company has reported strong performance through the first three quarters of fiscal 2025, with net sales up 5.5% year-over-year and improvements in net loss and earnings per share. United Natural Foods expects to meet its multi-year financial targets ahead of schedule and anticipates that insurance coverage will adequately address the cyber incident’s impact.
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