Morgan Stanley has upgraded Freshpet (NASDAQ: FRPT) to Overweight from Equalweight and lifted its price target to $90.00 from $71.00, signaling a more constructive outlook for the pet-food maker after a period of weak share performance and mixed quarterly results.
Valuation snapshot - Freshpet currently trades at a price-to-earnings ratio of 32.6. At the same time, the company’s price/earnings-to-growth (PEG) ratio is only 0.15, a figure the firm pointed to as evidence of attractive value relative to expected growth.
Analyst Eric Serotta told clients that Morgan Stanley believes Freshpet’s topline growth reached a trough in the fourth quarter of 2025 and is positioned to re-accelerate sequentially in 2026, helped in part by easier year-over-year comparisons. The broker noted that Freshpet’s fiscal 2026 guidance - a range calling for 7-10% net sales growth - and the 9.1% consensus are being treated conservatively by the firm.
On the competitive front, Morgan Stanley said it now sees less risk from General Mills’ push into fresh dog food than previously thought. The firm pointed to a muted consumer reception to General Mills’ Blue Buffalo Love Made Fresh rollout in late 2025 as a reason for that reassessment.
Separately, Morgan Stanley flagged what it views as an underappreciated opportunity tied to the growing same-day grocery delivery initiatives at major retailers. The firm specifically referenced Walmart’s and Amazon’s aggressive expansion in that area as a potential tailwind for Freshpet’s distribution and sales.
Price target and multiples - The $90 price target is derived from roughly 17.5 times calendar-year 2027 EV/EBITDA. That multiple is a discount to Morgan Stanley’s roughly 20 times target multiples for Overweight-rated peers Celsius and e.l.f. Beauty. The target multiple was increased from about 13 times previously, a change the firm attributed to year-to-date expansion in consumer packaged goods peer multiples, clearer visibility on a topline acceleration, and reduced competitive risk.
By comparison, Freshpet currently trades at an EV/EBITDA of 22.1 times based on the last twelve months. Morgan Stanley and InvestingPro analysis both indicate the shares appear undervalued at current levels.
Market moves tell a mixed story: the stock is up 31% year-to-date, yet remains more than 50% below calendar-year 2025 highs. Morgan Stanley characterized the setup as a compelling 2:1 risk/reward skew for investors. An InvestingPro note also observes that net income is expected to grow this year, which underpins the bullish view.
Freshpet’s most recent quarterly report showed a slight divergence between profit and revenue performance - the company beat earnings expectations but narrowly missed revenue projections. Those fourth-quarter results were released from the company’s headquarters in Bedminster, New Jersey. Following that release there have been no new analyst upgrades or downgrades, and no recent updates have been announced regarding mergers or acquisitions involving Freshpet.
Investors weighing Freshpet’s prospects will be watching how the company translates delivery-channel opportunities and easing competitive pressures into sustainable sales momentum, and whether future quarterly reports continue to align with the firm’s thesis that growth has bottomed and will re-accelerate.