U.S. Foods is Wednesday's IBD Stock Of The Day as the food distributor looks to break out above a buy point before closing the book on 2024 next week.
The leading food service distributor partners with about 250,000 restaurants and food service operators. The Rosemont, Ill.,-based company also provides customers with e-commerce, technology and business solutions.
U.S. Foods reports fourth-quarter earnings and revenue before the market opens on Feb. 13. Analysts expect Q4 EPS to grow 25% to 80 cents with sales increasing 6% to $9.49 billion. That would be the third straight quarter of accelerating earnings growth.
On Jan. 13, U.S. Foods reaffirmed 2024 guidance of net sales of $37.7 billion-$38 billion and full-year earnings of $3.05-$3.15 per share. USFD stock advanced 1.4% that week.
Following U.S. Food's decision to maintain 2024 guidance, Morgan Stanley raised its price target on USFD to 82 from 76. This represents 15% upside compared to current trading levels.
The firm sees "reason for cautious optimism" on the prospects for the restaurant sector in 2025 and models modestly better U.S. industry growth this year of almost 5%, compared to just over 4% last year. However, the firm doesn't see underlying fundamental themes shifting quickly after a "sluggish" 2024.
Truist also hiked its price target to 78 from 74 and kept a buy rating on the shares, marking 9% upside.
Analyst consensus currently pegs 2024 earnings coming in at $3.12 per share with revenue totaling $37.87 billion, according to FactSet.
Looking further out, analysts project USFD earnings ballooning more than 100%, compared to 2023 levels, by 2028.
U.S. Foods Stock Performance
USFD shares edged up 0.2% to 72.02 during stock market action on Wednesday. On Monday, as President Donald Trump's tariff policy rattled the stock market, U.S. Foods actually gained around 0.6% after finding support at its 50-day line.
The stock has a 72.84 buy point from a cup base, according to MarketSurge chart analysis. Shares are about 2% below that entry as of Wednesday's stock market trading.
USFD's relative strength line is also hitting fresh highs of 89. The relative strength compares a stock's price action to that of the S&P 500. A rising line means the stock is outperforming the benchmark index. The stock advanced 49% in 2024 and is up more than 6% so far in 2025.
IBD Leaderboard added U.S. Foods stock on Tuesday as a new half-size position as it rebounds off the 10-week moving average.
Industry peer Performance Food Group fell 2.5% to 88.33 on Wednesday after reporting mixed fiscal second quarter 2025 financials. Earnings slightly missed expectations while revenue beat. PFGC Q2 EPS grew 9% while sales increased 9.4%.
Performance Food stock is working on a 92.44 buy point a from a cup base. Investors could use last week's high of 91.79 as a slightly early entry.
The 10 stocks in the IBD-tracked Wholesale-Food industry group are collectively up 0.3% so far in 2025.
USFD has a 96 Composite Rating out of a best-possible 99. The stock also has an 89 Relative Strength Rating and a 92 EPS Rating.
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