UPDATE: Credit Suisse Starts Vital Farms (VITL) at Neutral
Credit Suisse analyst Robert Moskow initiates coverage on Vital Farms (NASDAQ: VITL) with a Neutral rating and a price target of $35.00.
The analyst comments "Vital Farms offers a highly compelling investment proposition as follows: 1) it is the market leader in the small, but fast-growing pasture-raised egg category with 75% market share; 2) it has strong marketing and compelling line extensions, and has tapped into the growing consumer desire for more transparency in the food chain and ethical treatment of livestock; 3) it has a unique network of 200 egg farm suppliers and a state-of-the-art egg distribution facility, and is the only pasture-raised egg company with enough scale to expand on a national level into mainstream retail grocers; 4) its sales growth spiked to 79% in 2Q during the height of COVID-19 (well above the 33% pace of growth over the past four years), which pulled forward the company’s expectations for consumer adoption and expansion. That said, with the stock already trading at 26x our 2024 EBITDA estimate, we believe that investors should wait for a pullback before building a new position."
Shares of Vital Farms closed at $39.38 yesterday.
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