Stifel upgrades Vital Farms to buy on revenue growth

Investing.com -- Stifel upgraded Vital Farms Inc (NASDAQ:VITL) to “Buy” from “Hold” with a price target of $44 given an improved egg supply and processing capacity that would support near-term growth. 

“Our outlook for near-term growth is supported by an improving egg supply and processing capacity and the long-term growth potential remains attractive supported by household penetration momentum,” analyst at Stifel said.

The firm now estimates nearly 23% revenue growth to $744 million in fiscal 2025, with EBITDA expected to rise over 18% to $102.6 million. Vital Farms’ fourth-quarter results exceeded expectations, and its full-year guidance came in above Stifel’s estimates.

Though shares fell on Wednesday after the company disclosed a material weakness in accounting controls, Stifel said the issue is unlikely to impact current or historical numbers and expects remediation in fiscal 2026.

Vital Farms has expanded capacity, adding 125 farms in 2024 and enhancing its processing infrastructure, including a new production line in Springfield, Missouri. The company reaffirmed its long-term targets, projecting $1 billion in revenue by 2027. 

Stifel said the stock currently trades at 12.5 times estimated 2025 EBITDA and expects shares to move higher as growth accelerates in 2025. The $44 target reflects a 15-times EBITDA multiple on 2026 estimates.