StoneX reiterates Buy on Lifeway Foods stock, $35 target

StoneX has maintained its Buy rating for Lifeway Foods (NASDAQ:LWAY) and set a price target of $35.00 per share. This follows a company visit where CEO Julie Smolyansky discussed their strategy for growth in the kefir product line, driven by health and wellness trends and demographic factors. The stock is currently trading at $22.16, showing a significant discount to the analyst's target.

InvestingPro data suggests the shares are slightly overvalued at the moment, with a Fair Value of $21.68. StoneX noted Lifeway Foods' impressive revenue growth of 26% over the last year, reaching $242 million. The firm also expects an operational expansion in fiscal year 2027 that will increase production capacity and support additional product offerings, particularly in single-serve formats.

However, the stock has faced pressure due to gross margin compression from higher milk costs, currently sitting at 27%. StoneX expects this to improve by early fiscal year 2027 as net income is forecast to drop. Lifeway Foods' second-quarter 2026 sales reached $66.9 million, a 24.1% increase from the previous year. Despite this, the company reported a net income of $0.1 million, or $0.01 per share, with a gross margin of 19.5% due to increased costs in milk, resin, and transportation.

Freedom Broker upgraded Lifeway Foods' rating to Buy from Hold, with a price target of $32, while BTIG initiated coverage with a Buy rating and a price target of $32. These developments demonstrate continued interest and confidence in Lifeway Foods' market position.