On Monday, Piper Sandler, a financial services firm, increased its price target on shares of Performance Food Group (NYSE: NYSE:PFGC) to $92 from the previous target of $79. The firm has maintained its Overweight rating on the stock. The adjustment follows Performance Food Group's updated Fiscal 2025 guidance, which now includes the impact of the recently completed Cheney Brothers acquisition.
The analyst at Piper Sandler revised the Fiscal 2025 and Fiscal 2026 adjusted EBITDA estimates upward, attributing the change to the integration of the Cheney Brothers acquisition into Performance Food Group's financial outlook. Moreover, the firm has introduced its initial Fiscal 2027 estimates alongside this update.
The revision of the price target to $92 reflects a roll-forward of the long-term valuation framework by one year to accommodate the changes in net debt post-acquisition. The new target is based on Performance Food Group trading at approximately 10.5 times the firm's Fiscal 2026 adjusted EBITDA estimate.
The analyst expressed confidence in the Overweight rating by reaffirming the stance in the latest note. The updated guidance and the acquisition's incorporation into the financial model have provided a more robust outlook for Performance Food Group, leading to the raised price target. The firm's analysis indicates a positive view of the company's financial trajectory following the strategic acquisition.
In other recent news, Performance Food Group Company (PFG) reported its fiscal Q1 2025 financial results, comparing them to the same period in the previous fiscal year. The earnings conference call, led by CEO George Holm and CFO Patrick Hatcher, included both GAAP and non-GAAP financial measures, with reconciliations provided in the earnings release. The company also made forward-looking statements regarding future results, but cautioned that these could differ due to various factors.
In the absence of specific bearish or bullish details, the focus remained primarily on the company's financial standing. The call did not include a question and answer session, or it was not summarized in the provided context. As these are recent developments, investors are advised to consider the forward-looking statements with the understanding that they are subject to various influencing factors.
InvestingPro Insights
Performance Food Group's recent acquisition of Cheney Brothers and the subsequent upward revision of its price target by Piper Sandler are reflected in several key financial metrics and insights from InvestingPro. The company's market capitalization stands at $12.96 billion, underscoring its significant presence in the Consumer Staples Distribution & Retail industry.
InvestingPro data shows that Performance Food Group has demonstrated strong revenue growth, with a 2.96% increase in the last twelve months and a 3.19% quarterly growth. This aligns with the positive outlook expressed by Piper Sandler. The company's EBITDA growth of 8.34% further supports the analyst's optimistic stance.
However, investors should note that the stock is trading at a relatively high P/E ratio of 30.46, which InvestingPro Tips highlight as being high relative to near-term earnings growth. This could suggest that the market has already priced in much of the expected growth from the Cheney Brothers acquisition.
InvestingPro Tips also point out that while Performance Food Group is profitable and has shown a high return over the last decade, it suffers from weak gross profit margins. This is evident in the reported gross profit margin of 12.11% for the last twelve months.
For investors seeking a more comprehensive analysis, InvestingPro offers 5 additional tips that could provide further insights into Performance Food Group's financial health and growth prospects.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.