SpartanNash Co: Hold Rating Due to Stagnant Growth and Competitive Pressures

Analyst Kelly Bania of BMO Capital maintained a Hold rating on SpartanNash Co (SPTN – Research Report), with a price target of $20.00.

Kelly Bania has given his Hold rating due to a combination of factors influencing SpartanNash Co’s financial outlook. The company reported a slight improvement in adjusted EBITDA for the fourth quarter, surpassing expectations, yet the overall growth for 2024 remained flat. While there are strategic plans to venture into higher growth retail channels like Hispanic and convenience stores, these initiatives are still in their early stages and may not immediately counterbalance the ongoing headwinds.
Despite achieving notable cost savings over recent years, SpartanNash continues to face challenges, particularly from competition with larger peers and declining volumes at key customer accounts. The projected organic EBITDA for 2025 is expected to decline slightly, with sales growth remaining stagnant. The company’s recent acquisitions and the benefit of an extra fiscal week are factored into financial projections, but the valuation remains below historical averages, reflecting persistent top-line challenges. Therefore, Kelly Bania maintains a cautious outlook, reiterating a Hold rating with a target price of $20.

SPTN’s price has also changed slightly for the past six months – from $19.290 to $20.970, which is a 8.71% increase.