Freshpet faces slow sales on weaker spending, pet adoption trends

Investing.com --Bank of America downgraded Freshpet to Neutral from Buy and cut its price objective to $60 from $81, saying demand for fresh pet food has weakened as consumers rein in spending and pet adoption rates slow.

The brokerage said sales growth for the dog food maker has dropped to low double digits from above 20% last year, as Freshpet’s premium pricing has become less appealing and competition from larger rivals such as General Mills and Chewy increases.

Shares of the company are trading down 7% on Wednesday trading taking the YTD fall more than 70%.

BofA said the broader pet food category, especially dog food, has seen growth deteriorate over the past six months as consumers cut discretionary purchases and adoption trends tilt toward smaller dogs, which typically consume less.

The slowdown has prompted Freshpet to withdraw its earlier target for $1.8 billion in 2027 sales.

Analysts said the company still has opportunities to improve margins through technology upgrades and cost controls, but upside is limited unless sales growth accelerates again.

BofA now values the stock at about 14 times projected 2026 EBITDA, below its five-year average multiple of 23.

“We think upside in shares is likely capped over the next 12 months, unless the category/company sees a meaningful reacceleration in topline,” analysts at BofA said.

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