Bank of America Securities downgraded Freshpet from Buy to Neutral, reducing its price target by 26% to $60 from $81, after sales growth dropped to low double digits from more than 20% last year, reported Investing.com. The downgrade reflected weakened growth projections and growing competition in the fresh pet food category. Bank of America noted that overall pet food growth has declined during the past six months.
Bank of American analyst Peter Galbo said that while Freshpet’s valuation has significantly declined, potential upside is limited without a strong rebound in sales, reported Seeking Alpha. Although the influx of competitors affirms that frozen fresh pet food is a lasting trend, Freshpet’s topline growth has slowed from over 20% in late 2024 to low double digits.
Freshpet’s stock has experienced significant volatility, with 27 movements exceeding 5% over the past year, reported Trading View. The latest price change suggests the market views the news as notable but not transformational. A notable drop occurred 28 days ago when UBS reaffirmed its “Sell” rating and cut its price target by over 26%, from $65.00 to $48.00, signaling continued skepticism about the company’s prospects. Year to date, Freshpet shares have declined 65.9%, trading at $49.24, nearly 70% below their January 2025 peak of $162.59. A $1,000 investment five years ago would now be worth $410.24.
About Freshpet
Freshpet is a U.S.-based manufacturer of fresh, refrigerated dog treats and food for dogs and cats, according to Petfood Industry’s Top Companies database. Annual revenue for the company in 2022 was US$975.20. The company had 591 employees.
Milestones
2022: The company reported its strongest growth since goiong public. 2020: The company's sales grew by 29.7%.
2019: The company has plans to expand its manufacturing capacity with the renovation of an existing 50,000-square-foot building and a 90,000-square-foot addition. The $100 million strategic capital investment is expected to start production in the second half of 2020.
2018: Adweek names the company one of its Top Status Quo Defying brands.
2016: Freshpet completes a roughly US$25 million, 32,000-square-foot addition to its Pennsylvania plant. The work adds two production lines and a quality assurance lab. It's expected to earn SQF Level 3 Certification.
2014: Freshpet raises US$156 million in an IPO.
2013: Freshpet opens a 60,000-square-foot factory in Hanover Township, Pennsylvania, USA. The company also opens its small-batch "kitchens" in Pennsylvania.
