The stock market in general traded listlessly on Tuesday, but the trajectory of Freshpet (FRPT -2.87%) shares was particularly uninspiring. On the back of an analyst’s price-target cut, the next-generation pet care specialist’s stock closed the day nearly 3% lower. By contrast, the bellwether S&P 500 index essentially traded sideways.
Time for a trim
Before market open that day, Piper Sandler prognosticator Michael Lavery reduced his fair value assessment on Freshpet to $145 per share. That was down from his previous price target of $160. Lavery left his recommendation intact, however, which was good news for company bulls as this is and was overweight (buy, in other words).
At the current share price, this new level anticipates 68% potential upside for Freshpet.
According to reports, Lavery wrote that his move was based on the slowing revenue growth the company has demonstrated in recent weeks. He attributed this mainly to softened spending by lower- and middle-income customers; unfortunately, in his view, this should persist over the proximate future. On a brighter note, he added that higher-income consumers continue to spend.
All in all, though, given the company’s recent performance, the analyst believes its full-year 2025 results will land at the lower ends of its guidance.
Don’t count out this stock
Although Lavery cut his price target and waxed somewhat pessimistic in his latest take, it’s telling that he’s maintaining his equivalent of a buy recommendation. The company’s modern take on fresh, healthy comestibles for our animal friends is not only a novel approach, it’s one that has found a solid customer base for this still relatively young company. I’d still be bullish on its future.
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Freshpet. The Motley Fool has a disclosure policy.
