Bullish indicating open at $55-$60, IPO prices at $37
Investing.com - Wells Fargo (NYSE:WFC) has raised its price target on US Foods (NYSE:USFD) to $87.00 from $80.00 while maintaining an Overweight rating on the food distributor’s shares. The company’s stock has delivered an impressive 56.25% return over the past year, with current trading near $80.17.
The firm cited US Foods’ position as a share consolidator in a fragmented industry, noting the company has considerable self-help initiatives and an impressive share repurchase program. InvestingPro data confirms management’s aggressive share buyback strategy, with the company maintaining a healthy current ratio of 1.17 and good overall financial health.
Wells Fargo highlighted that US Foods has line of sight on industry-leading earnings per share growth of approximately 20%, making it an attractive stock in a consumer sector with limited good growth options that are reasonably defensive.
The research firm’s new price target represents a multiple of 12 times its 2026 EBITDA estimate for US Foods.
Wells Fargo also noted that a potential deal with Performance Food Group (NYSE:PFGC) would only enhance US Foods’ appeal, while expressing that they remain positive and buyers of recent weakness in the stock.
In other recent news, US Foods reported its second-quarter 2025 earnings, delivering an adjusted earnings per share (EPS) of $1.19, which exceeded analyst expectations of $1.13. However, the company’s revenue came in below forecasts, with $10.08 billion reported against the anticipated $10.19 billion. Despite the revenue miss, the company raised its adjusted EBITDA guidance for the year, highlighting strong performance in this area. Truist Securities responded by increasing its price target for US Foods to $90, up from $83, while maintaining a Buy rating. This adjustment was influenced by the company’s notable EBITDA growth. These developments come amid a mixed performance that saw the company’s stock decline, reflecting varied investor reactions. The combination of an EPS beat and revenue shortfall has been a focal point for analysts and investors alike.
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