USFD Stock Forecast & Price Target

US Foods Holding Corp is positioned for significant growth, with expectations of local case growth reaching or exceeding 5% through enhanced service levels and improved sales force compensation, alongside technological upgrades. The company anticipates a 10% increase in underlying adjusted EBITDA over the next three years, projecting over $2.5 billion by 2028, driven by strategic sourcing and margin expansion efforts. With a favorable industry backdrop and limited competitive pressures, the outlook suggests that US Foods will achieve substantial free cash flow generation, leading to multiple expansion in alignment with peer valuations.

US Foods Holding Corp's negative outlook is primarily driven by a lowered sales forecast of $85 million, bringing total expected sales to $9.89 billion, which falls below consensus estimates, while the EBITDA estimate remains unchanged at $487 million. Significant risks influencing this outlook include heightened competition due to industry consolidation, volatility in food costs impacting profitability, potential losses from key contracts, and pressures from rising wage and benefit costs. Additionally, the vulnerability of the company's information technology systems poses a threat to sales stability, further contributing to the negative financial sentiment surrounding US Foods.