Performance Food Group (PFGC) PT Raised to $72 at Guggenheim

Guggenheim analyst John Heinbockel raised the price target on Performance Food Group (NYSE: PFGC) to $72.00 (from $68.00) while maintaining a Buy rating.

The analyst commented, "We were somewhat surprised by the magnitude of today’s share price outperformance (+9.1%) versus the broader market (S&P500: down 0.76%) and foodservice peers (SYY: +1.2%, UNFI: +1.9%; USFD: +1.7%), recognizing the pull-back preceding the print over the past month. 4Q operating results were mixed - with a top-line miss and an EBITDA beat—and though the midpoint of 2024 EBITDA guidance was above the consensus (by $25 million) the cadence of a mini-hockey stick is coming into focus. That said, independent case growth is accelerating and remains the sector’s healthiest, Vistar/Core-Mark remain buffers against deflation, and there are several gross margin drivers to counter elevated labor costs. We raise our 2024 and 2025 EBITDA estimates to $1.484 billion and $1.631 billion, respectively, on gross margin expansion and increase our PT to $72 (from $68), a seemingly conservative ~10x multiple on 2024E— Exhibit 1. We stay BUY rated ahead of re-accelerating profit growth."

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