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

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, Inc (NASDAQ: CHEF) and Performance Food Group Co (NYSE: PFGC).

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.

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.

Performance Food Group Company

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 (NYSE: SYY) by 4.7 percent.

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.

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Latest Ratings for CHEF

Jul 2020Piper SandlerDowngradesOverweightNeutral
Jul 2020BTIGInitiates Coverage OnNeutral
May 2020BMO CapitalMaintainsMarket Perform

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