These Growing Companies Will Post Record Revenue
Pandemic winners like Freshpet (NASDAQ:FRPT) and Graphic Packaging Holding Company (NYSE:GPK) have produced robust returns for shareholders since the peak of the scare. While the pandemic is still with us, it is subsiding, but not the tailwinds driving these stocks.
In the case of Freshpet, America's love of their pets and the ever-increasing dollar value assigned to them is driving robust growth that should last for several more quarters, if not several more years. In the case of Graphic Packaging, consumer trends suggest business will remain strong far into the future. In both cases, analysts see opportunity and so do we.
A Double Upgrade For Freshpet
Freshpet is an interesting story because during the pandemic demand for its product was so high it literally could not keep up with the business. In many places, Freshpet cases were empty and stayed empty for weeks if not months but that problem is being resolved. The company has been aggressively expanding its capacity and that should be seen in both the revenue and earnings this quarter. Analysts are expecting over $116 million in revenue which will be good not only for 38% year-over-year growth, but for an acceleration of growth from the previous quarter and a company record.
Analysts rate the stock a buy and that sentiment is getting stronger. The company just got two upgrades to buy from hold and each with a price target of $175. The $175 target matches the Marketbeat.com consensus estimate but it is a bit shy of the high price target of $229. Regardless, the consensus estimate is worth nearly 25% of upside and that is likely just the beginning of a much larger move. With revenue growing, accelerating shares of Freshpet could easily exceed the current all-time high of $180 and continue to trend higher along with revenue and earnings growth.
Graphic Packaging Holding Company Is In Demand
Graphic Packaging Holding Company’s revenue and earnings show virtually no impact from the pandemic because of the fundamental nature of the business. The company makes packaging products for food and beverage items and consumer goods of all variety and its business is supported by robust consumer spending as well as increasing use of e-commerce.
Revenue has been growing on a sequential basis for several quarters and topped pre-pandemic levels long ago. Analysts are expecting revenue to set a company record this quarter and we see upside risk in the numbers. Demand for consumer goods is high across most verticals and should drive results above consensus.
The analyst activity in Graphic Packaging Holding Company is truly exciting because the company is getting upgraded and attracting new analysts. The company recently got one double upgrade to Outperform from Neutral in tandem with four initiated ratings that amount to a Firm/Strong Buy.
The current consensus estimate assumes about 16% upside, but the high price target of $26 assumes 33% upside and we see the consensus estimates moving higher. The Marketbeat consensus price target for Graphic Packaging Holding Company is up nearly 100% in the last 12 months and nearly 6% in the last 30 days alone. Shares of the stock are up nearly 100% in that time as well and we see the uptrend continuing. Graphic Packaging also pays a very safe 1.6% dividend yield.
