JPMorgan upgrades Freshpet, says sales growth will outpace peers

JPMorgan upgraded Freshpet (FRPT) to Overweight from Neutral with a price target of $68, up from $66. The stock sold off 9% yesterday following a Q1 sales beat and guidance raise, the analyst tells investors in a research note. The firm expects Freshpet’s sales and EBITDA growth to outpace its staples peers, and does not think the stock’s current valuation sufficiently reflects this. Freshpet could raise its long-term gross margin target when it reports Q2 earnings, JPMorgan contends. A variety of new brands are entering the fresh pet food space, “but consistent with the past, their traction seems to be limited up to this point,” the firm adds.