US Foods: Margin Expansion Priced In, Initiate At Hold

Moretus Research
204 Followers
(11min)

Summary

  • Initiate coverage on US Foods with a Neutral rating and $77.66 price target, citing limited near-term risk/reward and modest upside potential.
  • Forecasting above-consensus FY25E/FY26E EPS growth driven by strong self-help initiatives, margin expansion, and capital allocation discipline, including a $1B share repurchase program.
  • USFD's operational efficiency and margin expansion are supported by vendor management savings, digital enhancements, and consistent high-margin volume growth in independent restaurants.
  • Risks include potential execution missteps and greater-than-expected benefits from digital transformation and supply chain investments, which could lead to valuation upside beyond the current price target.
US Foods Truck

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Key thesis

We initiate coverage on US Foods Holding (USFD) at Hold with a $77.66 price target. US Foods is a leading distributor of food and food related non-food products to foodservice customers in the United States. Our view that USFD's structurally durable

This article was written by

Moretus Research
204 Followers
Moretus Research delivers state-of-the-art, buy-side quality equity research for serious investors seeking clarity, conviction, and alpha. Focused on U.S. public markets, Moretus applies a structured, repeatable framework to identify companies with durable business models, mispriced cash flow potential, and intelligent capital allocation. Built on institutional standards, Moretus Research combines rigorous fundamental analysis with a high-signal, judgment-driven process—eschewing noise, narrative, and overly complex forecasting. Valuation is based on pragmatic, sector-relevant multiples tailored to each company’s business model and capital structure, with an emphasis on comparability, simplicity, and relevance. Research coverage tends to favor underappreciated companies undergoing structural change or temporary dislocation—situations where dispassionate analysis and variant perception can lead to asymmetric returns. All work reflects a deep respect for capital, discipline, and long-term compounding. Moretus Research aims to raise the standard for independent investment research—providing professional-grade insights, actionable valuation, and a strong filter for what truly matters in modern equity analysis.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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