Bernstein on US Foods (USFD): 'Leaning In on Performance'

Bernstein SocGen Group analyst Danilo Gargiulo reiterated an Outperform rating and $95.00 price target on US Foods (NYSE: USFD).

The analyst commented: "Leaning in on performance; US Foods delivered solid cost management and strong independent volumes, and we left the earnings call with renewed optimism for its trajectory and even more confidence in its ability to deliver on an ambitious LT algo. Revenue growth of 4.8% was supported by an aboveexpectations 3.9% independent case growth, although total case growth remained more muted at 1.1% and chains saw a continued decline. The updated FY25 guidance shows us that in a tougher macro, US Foods is still able to maintain a robust growth trajectory while finding cost leverage across multiple prongs of the business.

We are encouraged by the steady investments and demonstrated progress in areas that we expect will deliver top- and bottom-line growth, as management announced: increased expansion of Pronto in 3 new markets and higher penetration, driving higher sales guidance on Pronto for FY25 (from $900M to $950M), greater vendor management savings (from $110M to $120M), incrementality from MOXē (already 3% higher conversion rate YoY, or ~0.5% ind. case growth tailwind, BernE), progress on Descartes (route optimization tool, +2.3% in cases per mile YoY), and first cases shipped from semiautomated DC (50% of cases transitioned at Aurora). We are confident that the company will meet its updated FY25 guidance as well as remain on track for its LT algo. We remain OP with a PT of $95 for a 2:1 risk-reward."

For an analyst ratings summary and ratings history on US Foods click here. For more ratings news on US Foods click here.

Shares of US Foods closed at $71.40 yesterday.

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