The firm kept a Buy rating on Freshpet (NASDAQ:FRPT) after taking in the report.
"We believe a premium multiple (peer avg 5x) is justified as 1) industry/category tailwinds remain attractive, 2) supply constraints should ease in 2022 as larger projects come online and 3) 2025 targets remain achievable," noted analyst Bryan Spillane.
BofA's price objective of $125 on FRPT is based on discounted free cash flow analysis and a 7X EV/sales multiple off the CY23 estimate.
Freshpet CEO Billy Cyr's update: "Over the past two years, we have invested in significant new capacity and the talent to support it. We plan to use that capacity wisely -- budgeting conservatively to ensure the reliability of our operations in an uncertain environment but also planning aggressively to maximize our growth potential. We believe our plan for 2022 delivers the right balance - keeping us on track to achieve our 2025 goals and enable us to change the way people nourish their pets forever."