Market Overview

Credit Suisse Sees 'Particularly Attractive Value' In US Foods, Adds To Focus List


Credit Suisse's Investment Policy Committee added US Foods Holding Corp (NYSE: USFD) to its "U.S. Focus List" as the food service company is now considered to be a top investment idea.

The analysts are positive on the overall food service industry but see "particularly attractive value" in US Foods as the company is now showing earnings momentum after a "disruptive" merger attempt with SYSCO Corporation (NYSE: SYY).

According to the analysts, US Foods' fourth quarter earnings report sent a signal to the market that its fundamentals remain strong. Specifically, the company reported independent case growth of 6.1 percent and also guided its full-year 2017 EBITDA to grow by 7 to 10 percent.

The analysts also highlighted the multiple international initiatives that can drive growth while at the same time the company can foster industry consolidation to improve its 9 percent market share.

Meanwhile, US Foods' stock is trading at a "sizeable" valuation discount to Sysco of two to three turns on NTM (next 12 months) EV/EBITDA. In fact, the analysts $32 price target implies an approximate 10x EV/NTM EBITDA and approximate 24x NTM P/E which represents a discount to Sysco.

See Also:

Should Wal-Mart Investors Be Concerned That Amazon Invited Food Execs To Its Seattle Office?

Deutsche Bank's Recipe For Food Stock Investing In 2017

Latest Ratings for USFD

Sep 2020Morgan StanleyInitiates Coverage OnEqual-Weight
Sep 2020Wolfe ResearchInitiates Coverage OnOutperform
Sep 2020Credit SuisseMaintainsOutperform

View More Analyst Ratings for USFD
View the Latest Analyst Ratings


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Posted-In: Credit Suisse Food Companies food service food stocks US Focus ListAnalyst Color Analyst Ratings

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