Chef's Warehouse, Performance Food Group: 2 Food Names Analysts Find Appetizing

Analysts at Loop Capital Markets initiated coverage of two
food
merchandising companies on Tuesday with a favorable outlook:
The Chefs Warehouse, IncCHEF
and
Performance Food Group CoPFGC
.

Chefs Warehouse

Loop Capital's Andrew Wolf initiated coverage of The Chef's Warehouse with a Buy rating and $18 price target, as the distributor of specialty food products is positioned to take advantage of its leadership position.

Performance Food Group Company

Finally, the analyst is also bullish on the company's recent M&A track record in which it oversaw seven smaller deals which will add $510 million in aggregate sales. But now the company is "revving up the acquisition engine" and its fragmented market structure bodes well for acquisitive companies. Related Links: Oppenheimer Upgrades GrubHub, Sees Biggest Threat Towards Food Ordering As An Opportunity Credit Suisse Sees 'Particularly Attractive Value' In US Foods, Adds To Focus List

According to Wolf, volume growth is the most notable metric to measure the success of a food distributor and in The Chef's Warehouse's case, its growth averaged 5.5 percent dating back to 2013. Beyond financial metrics, the company boasts a superior product assortment and sales service levels compared to its rivals.

Finally, the company's status as a "best of breed" in organic vase volume gains, coupled with "ample capacity" in major markets should generate returns for investors moving forward.

Wolf also initiated coverage of Performance Food Group with a Buy rating and $35 price target. Similar to The Chef's Warehouse, the analyst's bullish stance stems from the company's impressive volume growth.

Wolf noted that from 2013 through 2017, Performance Food Group's quarterly case growth averaged 6.2 percent, which outperformed its peers who averaged 4.5 percent. Most recently, the first quarter saw a 7.7 percent case growth which even outperformed the industry giant SYSCO Corporation SYY by 4.7 percent.

date
ticker
name
Price Target
Upside/Downside
Recommendation
Firm
Posted In: Analyst ColorLong IdeasCommoditiesInitiationMarketsAnalyst RatingsTrading IdeasAndrew WolffoodFood Companiesfood stocksLoop Capital Markets
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!

Loading...