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Research Alert: CFRA Keeps Buy Opinion On Shares Of Us Foods Holding Corp.

05/10/2021 12:33

04:30 PM EDT, 05/10/2021 (MT Newswires) -- CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:

We lift our 12-month target by $1 to $45, 16.9x our 2022 EPS estimate of $2.67 (down from $2.75) and a discount to its historical average (18x), justified by recent earnings volatility and near-term cost headwinds. We lower our 2021 EPS estimate to $1.18 from $1.37. USFD posts 1Q adj-EPS of $0.12 vs. $0.15 (-20%). Case volumes continued to improve sequentially, but gross margins fell 30 bps Y/Y and 50 bps Q/Q due to product cost inflation, higher freight & labor expenses, and negative mix. While we expect some of these inflationary pressures to continue over the next few quarters, a major offset should be greater fixed cost leverage as overall volumes improve. USFD cut $180M of fixed costs last year, of which $150M should flow through as permanent savings ($30M will be reinvested). We keep a Buy as we think the shares still have room to run with the broader foodservice industry recovering. We believe USFD will emerge from the pandemic stronger and leaner, similar to our view of its largest competitor (Sysco).