Stifel has increased its price target for Freshpet Inc. to $84 from $65 while retaining a Buy rating on the shares. The stock is trading near $78.58 and carries a market capitalization of about $3.85 billion. Independent analysis referenced in the company review indicates Freshpet appears undervalued relative to its Fair Value, highlighted by a low PEG ratio of 0.15.
The broker pointed to Freshpet's robust fourth-quarter performance as the basis for the target hike. Over the last twelve months the company reported EBITDA of $183.66 million and achieved a gross profit margin of 40.8%. Revenue expanded 13% year-over-year, and Stifel identified gross margin expansion as a principal contributor to stronger-than-expected EBITDA performance for the period.
Management's initial guidance for fiscal 2026 revenue was roughly in line with market expectations, while the guidance for adjusted EBITDA came in below consensus. Stifel noted the lower EBITDA outlook is mainly attributable to incentive compensation and elevated spending tied to strategic investments.
The company reported an accelerated buy rate that Stifel attributed to increased investments and adjustments in price-pack architecture. Household penetration continued to rise, though at a slower pace than before. Management also increased its estimate of the total addressable market to 36 million households, citing demographic support including younger households that own pets.
On the capital expenditure side, Freshpet plans to raise capex to $150 million in 2026, with the flexibility to spend more if it seeks to speed deployment of new bag technology or install island fridges at retail locations. Stifel singled out both initiatives - new bag technology and island fridges - as catalysts to monitor through the year.
Following the quarter, Stifel's sales and adjusted EBITDA projections for 2026-2027 were largely unchanged. Analysts remain focused on how investments and pricing strategy evolve and how those moves feed into margin and top-line re-acceleration over the coming quarters.
Other analyst activity around Freshpet has reflected growing optimism. Morgan Stanley upgraded its rating to Overweight from Equalweight and lifted its price target to $90, citing an expectation of re-acceleration in topline growth for 2026 and characterizing the company's fiscal 2026 net sales guidance of 7-10% growth as conservative. TD Cowen also raised its price target to $80 while keeping a Hold rating, even as the company’s 2026 EBITDA guidance remained below consensus.
What this means for investors
- Freshpet's recent results and margin expansion prompted a material target increase from Stifel, reinforcing investor focus on profitability metrics such as gross margin and EBITDA.
- Management is balancing growth investments - including elevated capex and incentive compensation - with targets that reflect near-term margin pressure but potential medium-term payoff.
- Multiple brokerages have adjusted price targets and ratings in recent days, signaling varied but generally constructive analyst views on the company's growth prospects.
Context and next milestones
Key items to watch include execution on the new bag technology rollouts, deployment of island fridges in retailers, cadence of household penetration progress, and how investments flow through to margin and EBITDA in coming quarters. The company’s capex flexibility and decisions on accelerating rollouts will be central to near-term spending and longer-term distribution economics.