BTIG analyst Peter Saleh has maintained their neutral stance on UNFI stock, giving a Hold rating yesterday.
Peter Saleh’s rating is based on a combination of positive and cautious factors. United Natural Foods has shown encouraging performance with increased sales and productivity gains, surpassing expectations for the second consecutive quarter. The company reported a 4.9% increase in total sales, driven by significant growth in natural products and a rise in conventional products, along with a 3.0% increase in volume. However, despite these positive trends, the growth rate is expected to moderate in the second half of the year due to the lapping of new customer gains and modest EBITDA margin expansion.
Furthermore, while the company has made progress in network optimization and reducing shrink, which aids in improving operating expenses, the overall industry economics remain a concern. The sales growth is projected to slow down, and the valuation based on EV/EBITDA indicates modest profitability with an uncertain outlook. These factors contribute to a balanced perspective, leading to a Hold rating as the analyst prefers other opportunities in the distribution space.
In another report released yesterday, Jefferies also maintained a Hold rating on the stock with a $28.00 price target.
UNFI’s price has also changed dramatically for the past six months – from $14.510 to $24.570, which is a 69.33% increase.