Pivotal Research Starts Performance Food Group (PFGC) at Hold

Pivotal Research initiated coverage on Performance Food Group (NYSE: PFGC) with a Hold rating and a price target of $24.00. Analyst Ajay Jain thinks its IPO range already reflects a fair valuation.

"PFG is the best positioned among the leading foodservice distributors based on its recent track record and operating performance. Relative to Sysco, PFG also has plenty of room for further margin improvement. Although PFG lost out on the opportunity to become a national foodservice distributor following the cancellation of the Sysco/US Foods merger, we believe that PFG has been steadily gaining share of the higher margin “Street” business following the Blackstone led buyout in 2008. Based on the leadership team headed by CEO George Holm, we expect that trend to continue over the foreseeable future. However, after digesting the valuation implications of the planned IPO in some detail, we think the offering range already reflects a very fair valuation at 10-11x based on our projected EV/EBITDA multiple for FY16," said Jain.

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 $34.05 yesterday.

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