Bullish indicating open at $55-$60, IPO prices at $37
Investing.com - Guggenheim raised its price target on US Foods (NYSE:USFD) to $88.00 from $80.00 on Monday, while maintaining a Buy rating on the food service distributor. According to InvestingPro data, analyst targets for the $18 billion market cap company currently range from $77 to $103, with the stock trading at $80.06.
The price target increase follows US Foods’ second-quarter earnings report released on Thursday, which showed mixed results. The company reported sales growth of 4%, which fell short of expectations, while EBITDA grew 12% and exceeded Guggenheim’s projections. InvestingPro data shows the company’s trailing twelve-month EBITDA stands at $1.65 billion, with a relatively weak gross profit margin of 17.4%.
US Foods achieved a record EBITDA margin of 5.4% in the quarter, representing an expansion of 40 basis points. This performance occurred despite the relative underperformance of US Foods shares, which have declined approximately 6% relative to the S&P 500 since the earnings announcement.
Guggenheim attributed the stock’s recent weakness to investor concerns about "potential limitations to the organic growth runway" following the "rare top- and bottom-line dichotomy" in the quarterly results.
The firm raised its EBITDA estimates for US Foods to reflect new cost of goods sold initiatives, noting that the company’s foodservice model is "capable of driving a 100-150 GP-SG&A dollar spread on profitable share gains, COGS good guys, and SG&A self-help."
In other recent news, US Foods reported its second-quarter earnings for 2025, revealing an adjusted earnings per share (EPS) of $1.19, which exceeded the forecast of $1.13. However, the company reported revenues of $10.08 billion, falling short of the anticipated $10.19 billion. Following this mixed performance, US Foods adjusted its EBITDA guidance upwards for the year. Truist Securities responded by raising its price target for US Foods to $90 from $83, maintaining a Buy rating due to strong EBITDA growth. Similarly, Wells Fargo (NYSE:WFC) increased its price target to $87 from $80, keeping an Overweight rating. Wells Fargo highlighted US Foods’ role as a consolidator in a fragmented industry and its robust share repurchase program. These developments reflect a positive outlook from analysts despite the revenue miss.
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