Freshpet, the Consumer Defensive sector company, was revisited by a Wall Street analyst today. Analyst Kaumil Gajrawala from Jefferies downgraded the rating on the stock to a Hold and gave it a $53.00 price target.
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Kaumil Gajrawala has given his Hold rating due to a combination of factors impacting Freshpet’s growth and profitability outlook. The company is experiencing a noticeable slowdown in growth, with household penetration gains and sales velocity both declining. This deceleration poses risks, especially since Freshpet’s valuation is aligned with high-growth peers, yet lacks a near-term catalyst to drive significant improvement.
Furthermore, Freshpet’s efforts to attract new customers are not yielding the expected results, and existing customers are spending less. The company’s growth projections have been adjusted downward, reflecting a more conservative outlook. While Freshpet has achieved some cost targets, the potential for further overhead leverage is limited, and profitability targets may need revision. These factors collectively contribute to the Hold rating, as the current valuation does not support a more optimistic stance without clearer signs of top-line stabilization.
In another report released yesterday, Bank of America Securities also downgraded the stock to a Hold with a $60.00 price target.
Based on the recent corporate insider activity of 58 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of FRPT in relation to earlier this year.