Analyst Peter Saleh of BTIG maintained a Buy rating on The Chefs’ Warehouse (CHEF – Research Report), retaining the price target of $68.00.
Peter Saleh has given his Buy rating due to a combination of factors that highlight The Chefs’ Warehouse’s potential for growth and profitability. The company is poised to achieve mid-single-digit organic growth and expand its EBITDA margins, driven by strategic initiatives such as category expansion into seafood and specialty produce, leveraging technology, and utilizing existing capacity. These efforts are expected to increase sales from $3.8 billion to approximately $5.0 billion over the next three to four years.
Additionally, The Chefs’ Warehouse’s competitive position as a niche distributor serving upscale venues sets it apart from its peers. The company’s strategy of serving high-income customers in select markets, coupled with its ability to act as a one-stop shop in mature markets, provides a strong foundation for growth. Furthermore, the potential for entering new markets and the possibility of strategic acquisitions, supported by a higher stock price, contribute to the positive outlook. The valuation of a $68 price target reflects a 12.0x EV/EBITDA multiple, which is a premium based on current sales trends and long-term market-share opportunities.
Based on the recent corporate insider activity of 55 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of CHEF in relation to earlier this year.