USFD – Market expectations are for Uniform ROA to improve, but management may have concerns about volumes, initiatives, and inflation

May 17, 2022

  • US Foods Holdings Corp. (USFD) currently trades around corporate and historical averages relative to Uniform earnings, with a 23.3x Uniform P/E (Fwd. V/E’).
  • At these levels, markets are pricing in expectations for Uniform ROA to improve to 10%, accompanied by 5% Uniform asset growth.
  • Meanwhile, analysts expect Uniform ROA to expand to 13% by 2023, accompanied by 2% Uniform asset growth.
  • If sustained going forward, these levels would imply a stock price closer to $42, representing approximately 10% equity upside for the firm.
  • However, the firm’s most recent earnings call suggests management may have concerns about volumes, initiatives, and inflation.

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