DA Davidson reduced its price target on The Marzetti Company to $130 from $168, maintaining a Neutral rating on the stock. The firm set the new target at 11 times its calendar 2027 EBITDA estimate as Marzetti traded at $114.95.
The stock has fallen 28% over the past six months, reflecting investor concerns about growth prospects despite the company’s recent financial performance. Marzetti reported adjusted earnings per share of $1.46 in the fourth quarter, beating Wall Street’s estimate of $1.40, though revenue totaled $465.0 million, missing the forecast of $479.0 million. Net sales declined 2.2% year-over-year, while gross margin expanded by 220 basis points and adjusted operating income exceeded expectations.
DA Davidson highlighted Marzetti’s reliance on acquisitions and pricing strategies to drive growth as a key risk factor behind the target reduction. The firm acknowledged the company’s strong margin execution, healthy foodservice momentum, and the long-term potential of its Bachan’s brand. Management guided for mid-single-digit sales and adjusted operating income growth in fiscal 2027, driven by more than $100 million in Bachan’s revenue.
For the first quarter, Marzetti expects adjusted operating income to decline approximately 15% due to Cyclospora-related pressures, a seasonal headwind affecting fresh produce categories.
