US Foods
USFD
$97.70
+0.28%
US Foods Holding Corp. is one of the largest domestic foodservice distributors in the United States, selling and distributing more than 350,000 food and nonfood products to roughly 250,000 customer locations, including independent restaurants, chain restaurants, healthcare and hospitality clients, and education and government accounts, while also operating 98 cash-and-carry locations under the Chef'Store banner. With approximately $39 billion in fiscal 2025 sales and a 10% share of a highly fragmented industry, the company is a scale-driven broadline distributor whose 76 distribution facilities and 14 production centers give it a distinct logistical moat relative to smaller regional players, though it remains the clear number-two to Sysco. The current investor narrative centers on whether US Foods can sustain its multi-year margin-recovery and cost-efficiency program, evidenced by gross margin expanding to 18.2% in the June 2026 quarter from 17.6% a year earlier, while simultaneously growing revenue in the mid-single digits and returning capital through an aggressive buyback program that has reduced share count. Debate also hinges on the durability of food-away-from-home demand and whether the company's independent-restaurant exposure can keep delivering profitable volume growth as it digests a stock that has already re-rated sharply over the past year.…
USFD
US Foods
$97.70
Investment Opinion: Should I buy USFD Today?
Based on the synthesized data, USFD warrants a Buy rating. The core thesis is that the company is successfully executing a margin-recovery program, evidenced by gross margin expansion to 18.22% and operating margin improvement to 4.21%, while trading at a forward PE of 17.56x—a 31% discount to its trailing PE—and offering 19% upside to the analyst average target of $116. The consensus recommendation is 'buy' with a mean of 1.53, reflecting confidence in continued earnings growth.
The supporting evidence is compelling: revenue grew 4.46% year-over-year in Q2 2026, TTM free cash flow is $946 million, and the company is aggressively returning capital with $370 million in buybacks in Q2 alone, reducing share count. The PEG ratio of 0.565 and EV/EBITDA of 13.82x are reasonable for a defensive distribution business with improving profitability. The forward PE of 17.56x compares favorably to the broader Consumer Defensive sector, which often trades at 20x-25x forward earnings, suggesting a valuation discount that is unjustified given the margin momentum.
However, risks exist: the stock's recent 3-month underperformance (-3.52% vs. SPY +3.13%) and wide analyst target range ($65-$130) indicate uncertainty. The rating would upgrade to a strong buy if gross margins exceed 18.5% and revenue growth accelerates above 5%, but would downgrade to Hold if gross margins fall below 17.5% or if revenue growth decelerates below 3%. At 17.56x forward earnings, the stock appears undervalued relative to its growth prospects and historical multiples, making it an attractive entry point for long-term investors.
Sign up to view all
USFD 12-Month Price Forecast
US Foods presents a compelling investment case with improving profitability, strong cash flow, and an attractive valuation relative to its growth prospects. The company's margin recovery story is intact, and the discounted forward PE suggests the market is not fully pricing in continued earnings growth. However, recent stock underperformance and a wide analyst target range indicate uncertainty, warranting medium confidence. I would upgrade to high confidence if Q3 results show gross margin above 18.5% and revenue growth accelerating, but would downgrade to neutral if margin expansion stalls or if revenue growth falls below 3%. The risk/reward is favorable for long-term investors, with a base case target of $105-$116 and a bull case of $130, against a bear case of $65-$85.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on US Foods's 12-month outlook, with a consensus price target around $116.00 and implied upside of +18.7% versus the current price.
Average Target
$116.00
0 analysts
Implied Upside
+18.7%
vs. current price
Analyst Count
—
covering this stock
Price Range
$65 - $130
Analyst target range
Coverage on US Foods is solid, with 15 analysts contributing to consensus. The recommendation distribution skews bullish, with a consensus recommendation of "buy" and a recommendation mean of 1.53 (where 1.0 is a strong buy), and the average price target of $116.00 implies roughly 19% upside from the current price of $97.43. Recent institutional actions reinforce the constructive tone: BTIG, UBS, TD Cowen, Citigroup, and Guggenheim all reiterated Buy ratings in August 2026, and Wells Fargo maintained Overweight, while JP Morgan, Piper Sandler, and Morgan Stanley stayed Neutral or Equal Weight. The consensus therefore leans bullish, though the presence of several neutral ratings suggests the bull case is not unanimous. The target range is wide, spanning $65.00 at the low end to $130.00 at the high end, a spread of 100% of the low target that signals meaningful disagreement about the company's trajectory. The $130 high target likely assumes continued gross-margin expansion, successful cost-efficiency execution, and multiple expansion toward the upper end of the historical range, while the $65 low target appears to price in margin compression, weakening restaurant demand, or a recession-driven volume decline. The consensus EPS estimate of $8.85 (range $8.72-$9.02) and revenue estimate of $50.0 billion (range $49.5-$50.8 billion) imply analysts expect roughly 27% EPS growth on about 27% revenue growth versus the fiscal 2025 base, a demanding but achievable bar given the margin momentum. The wide target spread, combined with the recent 3-month underperformance, suggests the stock is in a show-me phase where upcoming quarterly results will determine whether it re-rates toward the high target or drifts toward the low end.
Bulls vs Bears: USFD Investment Factors
The bull case currently has stronger evidence, supported by tangible margin expansion, robust free cash flow, and a discounted forward valuation. The most important tension is whether US Foods can sustain its margin recovery amid a decelerating revenue growth environment (4.46% YoY in Q2 2026) and recent stock underperformance. If margin gains continue and the company hits consensus EPS of $8.85, the stock could re-rate toward the $116 average target; however, if margin expansion stalls or food-away-from-home demand weakens, the premium valuation could compress, risking a move toward the $65 low target. The resolution of this tension will likely hinge on upcoming quarterly results and management's ability to execute on cost efficiencies.
Bullish
- Margin expansion driving earnings leverage: Gross margin expanded to 18.22% in Q2 2026 from 17.63% a year earlier, while operating margin rose to 4.21% from 3.71%. This 59 basis point improvement in gross margin and 50 basis point gain in operating margin demonstrates that cost-efficiency initiatives are yielding tangible profit leverage.
- Robust free cash flow and aggressive buybacks: TTM free cash flow is $946 million, with Q2 2026 alone generating $355 million on just $76 million of capex (5.67x capex coverage). The company repurchased $370 million of stock in Q2 2026, reducing shares outstanding to 218.6 million from 230.4 million a year ago, which accretes EPS.
- Attractive valuation versus growth: The forward PE of 17.56x represents a 31% discount to the trailing PE of 25.63x, and the PEG ratio of 0.565 suggests the stock is cheap relative to expected earnings growth. Consensus EPS of $8.85 implies roughly 27% growth, which is not fully reflected in the current multiple.
- Strong analyst consensus and upside: With 15 analysts covering, the consensus recommendation is 'buy' (mean 1.53), and the average price target of $116 implies 19% upside from $97.43. Recent reiterations from BTIG, UBS, TD Cowen, Citigroup, and Guggenheim in August 2026 reinforce the constructive view.
Bearish
- Recent momentum deterioration and underperformance: While USFD is up 29.44% over 1 year, it has declined 2.05% over the past month and 3.52% over 3 months, underperforming SPY by 2.14 and 6.65 percentage points respectively. This deceleration suggests the stock is in a consolidation phase and may struggle to regain momentum without a catalyst.
- Elevated valuation relative to history: The price-to-book ratio of 4.03x is near the high end of its historical band (versus 1.7x-2.3x in 2022-2023), and the trailing PE of 25.63x is above the sector median. This leaves little room for error if growth disappoints.
- Thin margins vulnerable to cost pressures: Net margin is only 2.61% and operating margin 4.21%, leaving minimal buffer if food inflation or wage pressures accelerate. Any gross margin reversal could significantly impact profitability given the low-margin nature of distribution.
- Leverage and interest coverage concerns: Debt-to-equity is 1.33 and interest coverage is 5.75x, which is manageable but limits financial flexibility. With $77 million in quarterly interest expense, rising rates could pressure earnings.
USFD Technical Analysis
US Foods is in a sustained uptrend that has recently transitioned into a high-level consolidation. The stock is up 29.44% over the past year and 30.53% year-to-date, and at $97.43 it sits at roughly 63.8% of its 52-week range of $69.875 to $111.42, having pulled back from the August high of $111.42. That positioning suggests the stock retains a constructive primary trend but is no longer at momentum extremes, leaving room for either a renewed push toward the highs or a deeper mean-reversion move. Recent momentum has clearly decelerated and diverged from the longer-term trend. While the 1-year change is +29.44%, the 1-month change is -2.05% and the 3-month change is -3.52%, meaning the stock has lost ground over the last quarter even as it remains strongly positive over 12 months. Relative strength confirms this softening: USFD trails SPY by 2.14 percentage points over 1 month and by 6.65 points over 3 months, even though it leads by 13.44 points over 1 year, a classic pattern of a former leader digesting gains. The short ratio of 5.41 days-to-cover indicates a meaningful short base that could fuel squeezes on upside breaks, but the recent drift lower argues shorts are not yet under pressure. Key technical levels are well defined. Support sits near the 52-week low of $69.875, with intermediate support around the $92-$94 zone where the stock has repeatedly stabilized since September, while resistance is the 52-week high of $111.42, followed by the August consolidation band near $108-$110. A decisive breakout above $111.42 would signal trend continuation and likely invite momentum buyers, whereas a breakdown below $92 would threaten the uptrend structure and open the door toward the mid-$80s. With a beta of 0.857, USFD is roughly 14% less volatile than the broader market, which supports larger position sizing for risk-adjusted exposure but also means it will likely lag in sharp risk-on rallies.
Beta
0.86
0.86x market volatility
Max Drawdown
-21.1%
Largest decline past year
52-Week Range
$70-$111
Price range past year
Annual Return
+30.0%
Cumulative gain past year
| Period | USFD Return | S&P 500 |
|---|---|---|
| 1m | +2.5% | +1.8% |
| 3m | -3.3% | +3.5% |
| 6m | +8.3% | +11.2% |
| 1y | +30.0% | +19.1% |
| ytd | +30.9% | +14.1% |
Bobby - Your AI Investment Partner
Get real-time data, AI-driven personalized investment analysis to make smarter investment decisions
USFD Fundamental Analysis
US Foods' revenue trajectory remains solidly positive but is normalizing toward mid-single-digit growth. Fiscal Q2 2026 (quarter ended June 27, 2026) revenue was $10.532 billion, up 4.46% year-over-year from $10.082 billion in the prior-year quarter, and the sequential progression from $9.610 billion in Q1 2026 and $9.800 billion in Q4 2025 shows steady top-line expansion. On a trailing four-quarter basis the company has generated roughly $39.5 billion in sales, consistent with its $39 billion fiscal 2025 base and its 10% share of a fragmented market. The growth is being driven by broad-based demand across its customer mix, with independent restaurants (33% of sales), chain restaurants (23%), and healthcare/hospitality (27%) providing diversification, though the mid-single-digit pace implies the investment case now rests more on margin and capital return than on accelerating revenue. Profitability is improving and is the core of the story. Q2 2026 net income was $275 million on a 2.61% net margin, up from $224 million and a 2.22% net margin in the year-ago quarter, while gross margin expanded to 18.22% from 17.63%. Operating income rose to $443 million (4.21% operating margin) from $374 million (3.71%), and EBITDA increased to $564 million from $489 million, demonstrating meaningful operating leverage. The company's gross margin of 17.4% on a TTM basis is thin but typical for foodservice distribution, where scale, private-label penetration, and cost control drive profitability; the steady climb from the 17.2% range in early 2025 toward 18.2% signals the efficiency initiatives are working. The balance sheet is leveraged but manageable, with debt-to-equity of 1.33 and a current ratio of 1.16. Free cash flow is robust: TTM FCF is $946 million, and Q2 2026 alone generated $355 million of FCF on $431 million of operating cash flow against just $76 million of capex, a 5.67x capex coverage ratio. ROE stands at 15.70% and ROA at 5.83%, healthy for a distribution business, while the company returned capital aggressively with $370 million of buybacks in Q2 2026 alone. The main financial risk is the debt load and thin interest coverage (5.75x in Q2 2026), but with consistent FCF generation and no dividend, US Foods has ample internal funding capacity for growth and repurchases.
Quarterly Revenue
$10.5B
2026-06
Revenue YoY Growth
+4.5%
YoY Comparison
Gross Margin
18.2%
Latest Quarter
Free Cash Flow
$946000000.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
Open an Account, get $2 TSLA now!
Valuation Analysis: Is USFD Overvalued?
Because US Foods is solidly profitable with positive net income of $275 million in the latest quarter, the PE ratio is the appropriate primary valuation metric. The stock trades at a trailing PE of 25.63x and a forward PE of 17.56x based on consensus EPS of $8.85, a roughly 31% compression that implies the market expects meaningful earnings growth over the next year. That gap between trailing and forward multiples is the single most important valuation signal here, suggesting investors are underwriting continued margin expansion and EPS accretion rather than paying up for current earnings. On a peer-relative basis, USFD looks inexpensive. Its PS ratio of 0.44x and EV/Sales of 0.657x are low in absolute terms, and its forward PE of 17.56x compares favorably to the broader Consumer Defensive sector, which typically trades at a premium multiple; the PEG ratio of 0.565 further suggests the stock is cheap relative to its expected growth rate. The EV/EBITDA of 13.82x is moderate for a distribution business with improving margins, and the 4.03x price-to-book reflects a business that earns a 15.7% ROE. Relative to a sector where many staples names command 20x-25x forward earnings, USFD's 17.56x forward PE represents a discount that appears justified only if growth stalls, which the margin trend does not currently support. Historically, USFD's valuation has re-rated substantially. Its PE ratio has ranged from roughly 14.5x in mid-2023 to over 60x in late 2024, and its PS ratio has climbed from about 0.90x in late 2022 to 2.04x in the June 2026 quarter, though the current reported PS of 0.44x reflects a different share-count and data basis. The stock's price-to-book of 4.03x is near the high end of its historical band (versus 1.7x-2.3x in 2022-2023), indicating the market now assigns a premium for the company's improved profitability and capital returns. This places USFD in the upper portion of its own historical valuation range, meaning expectations are elevated and execution must continue to justify the multiple.
PE
25.6x
Latest Quarter
vs. Historical
Mid-Range
5-Year PE Range 14x~43x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
13.8x
Enterprise Value Multiple
Investment Risk Disclosure
US Foods faces financial and operational risks primarily from its leveraged balance sheet and thin margins. With debt-to-equity of 1.33 and interest coverage of 5.75x, the company carries $77 million in quarterly interest expense, which consumes a meaningful portion of operating income. Net margin is only 2.61%, leaving little cushion if cost inflation accelerates or if the company fails to sustain its gross margin expansion (18.22% in Q2 2026). Additionally, revenue growth has decelerated to 4.46% year-over-year, and any further slowdown could pressure profitability given the fixed-cost nature of distribution. The company's reliance on independent restaurants (33% of sales) also exposes it to discretionary consumer spending trends, which could weaken in an economic downturn.
Market and competitive risks include valuation compression if growth expectations are not met. The stock trades at a trailing PE of 25.63x and a price-to-book of 4.03x, near the high end of its historical range, leaving it vulnerable to multiple contraction. Competition from Sysco and regional distributors could limit pricing power and margin expansion. Macro sensitivity is moderate given the beta of 0.857, but a recession could reduce food-away-from-home demand. Recent news is absent, but the stock's 3-month underperformance (-3.52% vs. SPY +3.13%) suggests waning momentum. Regulatory risks are low, but any changes in food safety or labor regulations could increase costs.
In a worst-case scenario, a combination of margin compression, revenue decline, and multiple contraction could drive the stock toward its 52-week low of $69.875 or the analyst low target of $65. From the current price of $97.43, that represents a downside of approximately 28% to the 52-week low and 33% to the low target. This scenario could unfold if food inflation accelerates, independent restaurant traffic declines, and the company fails to achieve its cost-efficiency targets, leading to earnings misses and analyst downgrades. The historical max drawdown of -21.09% further underscores the potential for significant losses in adverse conditions.
FAQ
The most severe risk is margin compression, as the company operates on thin margins (net margin 2.61%) and any cost inflation could significantly impact profitability. Financial risk stems from leverage, with debt-to-equity of 1.33 and interest coverage of 5.75x, leaving limited flexibility. Competitive risk from Sysco and regional players could pressure pricing and market share. Macro risk includes a potential recession reducing food-away-from-home demand, particularly from independent restaurants (33% of sales). Additionally, the stock's recent underperformance (-3.52% over 3 months) and wide analyst target range ($65-$130) indicate uncertainty. Ranked by severity: margin compression, demand slowdown, competitive pressures, and leverage.
Our 12-month forecast includes three scenarios: a base case (50% probability) with a target range of $105-$116, assuming steady 4-5% revenue growth and stable gross margin around 18.2%; a bull case (30% probability) targeting $116-$130, driven by margin expansion above 18.5% and EPS growth toward $9.02; and a bear case (20% probability) targeting $65-$85, if margins compress and revenue growth slows. The most likely scenario is the base case, hinging on the company's ability to sustain margin gains and meet consensus EPS of $8.85. Key catalysts include Q3 earnings, independent restaurant demand trends, and buyback execution.
USFD appears undervalued relative to its growth prospects. The forward PE of 17.56x is below the broader Consumer Defensive sector average of 20x-25x, and the PEG ratio of 0.565 suggests the stock is cheap relative to expected earnings growth. The price-to-book ratio of 4.03x is near the high end of its historical range, but this reflects improved profitability and capital returns. The EV/EBITDA of 13.82x is moderate for a distribution business with expanding margins. The market is pricing in roughly 27% EPS growth, which seems achievable given the margin momentum. If the company meets consensus EPS of $8.85, the stock could re-rate toward $116, implying 19% upside.
From a risk/reward perspective, USFD appears attractive for long-term investors. The stock trades at a forward PE of 17.56x, a 31% discount to its trailing PE, and offers 19% upside to the analyst average target of $116. The company is executing a margin-recovery program, with gross margin expanding to 18.22% in Q2 2026, and generates robust free cash flow of $946 million TTM. However, the biggest downside risk is a margin reversal that could push the stock toward the analyst low target of $65, representing 33% downside. For investors comfortable with moderate volatility (beta 0.857) and a 12-18 month horizon, USFD is a good buy, especially on dips near the $92 support level.
USFD is best suited for long-term investment, given its defensive characteristics, low beta (0.857), and consistent free cash flow generation. The company does not pay a dividend, so returns rely on capital appreciation and buybacks, which are better realized over a multi-year horizon. The margin-recovery story and industry consolidation trends are multi-year drivers. Short-term trading is less advisable due to recent momentum deterioration and a wide analyst target range, which could lead to volatility. A minimum holding period of 12-18 months is recommended to allow for the execution of cost-efficiency initiatives and potential multiple expansion. Earnings visibility is moderate, with quarterly fluctuations possible.