Hold Rating on Performance Food Group Amid Conservative Financial Targets and Integration Risks

BTIG analyst Peter Saleh has maintained their neutral stance on PFGC stock, giving a Hold rating yesterday.

Peter Saleh has given his Hold rating due to a combination of factors surrounding Performance Food Group’s recent investor meeting and financial outlook. The company presented a new set of three-year financial targets, which appear achievable but slightly conservative, with expected mid-single-digit revenue growth and low-teens EBITDA growth. Despite the positive surprise in EBITDA margin expansion, the overall financial outlook was not as comprehensive as anticipated.
Additionally, while the management team has a strong track record, there are concerns about the varied business model and potential integration risks from recent acquisitions. The company’s focus on geographic expansion, particularly in the West, suggests future acquisitions, but current sales trends and a modest return profile contribute to the Hold rating. Furthermore, the valuation based on EV/EBITDA and the absence of a price target for Neutral-rated stocks also play a role in maintaining the Hold position.

Saleh covers the Consumer Cyclical sector, focusing on stocks such as The Chefs’ Warehouse, Wingstop, and Darden Restaurants. According to TipRanks, Saleh has an average return of 11.4% and a 63.96% success rate on recommended stocks.

In another report released yesterday, Morgan Stanley also maintained a Hold rating on the stock with a $93.00 price target.