UBS raises United Natural Foods stock price target on profit strength

UBS has increased its price target for United Natural Foods Inc. shares to $50, maintaining a neutral rating. The stock, currently trading at $45.29, has surged 57% over the past year. United Natural Foods reported robust profit performance, with a 48% year-over-year adjusted EBITDA growth in the fourth quarter, reaching new heights.

The company anticipates a net income growth this year and a strong free cash flow yield of 12%. Notably, the company's network optimization and productivity initiatives, amid a challenging transition period, contributed to its profitability gains. United Natural Foods' fiscal 2027 net sales outlook, at the midpoint, is projected to grow by approximately 1.1% to $31.5 billion.

Despite a conservative revenue guidance, UBS's fair value analysis indicates the stock remains undervalued. The company's stock appears to have factored in the macroeconomic challenges in food retail. In related news, United Natural Foods' fourth-quarter fiscal 2026 earnings exceeded expectations, with adjusted earnings per share of $0.69, compared to the estimated $0.61.

However, revenue slightly missed forecasts, amounting to $7.64 billion against the projected $7.69 billion. Despite the earnings beat, revenue declined by 2% compared to the previous quarter.