Vital Farms downgraded to Hold from Buy at Benchmark

Benchmark downgraded Vital Farms (VITL) to Hold from Buy and removed the firm’s price target after the company issued a “volatile” Q1 outlook, tempered FY26 revenue growth expectations and guided toward sharp margin compression. Considerable uncertainty is “now fully on the table,” and while the firm remains “highly convicted regarding the power of Vital Farms’ brand and long term revenue growth trajectory,” it believes margin pressure and a lack of credibility largely offset the positives for now as it expects this situation will take “several quarters” to play out.