Guggenheim Reiterates Buy Rating on Performance Food Group (PFGC)

Guggenheim analyst John Heinbockel reiterated a Buy rating and $115.00 price target on Performance Food Group (NYSE: PFGC).

The analyst comments "Although consistent profit improvement progress has been made in every segment, we believe clear potential exists for additional gains on the back of procurement efforts, favorable mix shifts, and selective labor productivity initiatives. Incremental P&L disclosures in the recent 10-K showcase gross margin expansion across the enterprise that more than offsets ongoing wage inflation-driven expense pressure—Convenience’s labor productivity-oriented de-leverage is the exception. Importantly, the 300 basis point gross margin gap versus the Foodservice peers offers a sizable target to address primarily through stronger procurement efforts. This bolsters the case for a 10% EBITDA algo which likely merits a higher multiple than the current 10.2x—Exhibit 1. With each turn representing $13 in per-share appreciation, per our estimates, we see upside to the $115 price target and reiterate our BUY-rating amid a modest pick-up in independent cases."

For an analyst ratings summary and ratings history on Performance Food Group click here. For more ratings news on Performance Food Group click here.

Shares of Performance Food Group closed at $101.86 yesterday.

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