The food industry is navigating a difficult macroeconomic climate. Inflation has diminished consumers’ purchasing power, leading many to opt for cost-effective alternatives, such as private-label products over well-known brands. Additionally, some companies are facing weaker performance in their foodservice segments, as slower foot traffic in quick-service restaurants dampens sales in certain markets.
The Zacks-defined Food-Miscellaneous industry consists of companies that manufacture and sell a wide range of food and packaged and comfort food items. To navigate persistent headwinds, companies in this space are focusing on cost efficiencies, investing in innovation and expanding their portfolios with health-conscious and budget-friendly offerings.
These strategic initiatives position a few industry players for long-term growth. Here we recommend three miscellaneous food stocks with a favorable Zacks Rank. These are Celsius Holdings Inc. CELH, United Natural Foods Inc. UNFI and Utz Brands Inc. UTZ.
These three stocks have strong revenues and earnings growth potential for 2025. They have seen positive earnings estimate revisions in the last 60 days. Moreover, these stocks have double-digit short-term price upside potential. Each of our picks carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy). ). You can see the complete list of today’s Zacks #1 Rank stocks here.
The chart below shows the price performance of our three picks in the past three months.
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Zacks Rank #1 Celsius Holdings specializes in commercializing healthier, nutritional functional foods, beverages and dietary supplements. CELH markets Celsius?, the calorie burner, through Celsius Inc., which is its wholly owned operating subsidiary. CELH sells its products through grocery, drug, convenience, club and mass, and health and fitness channels.
CELH’s products are produced in Mooresville, North Carolina, and Monroe, Wisconsin. Celsius Holdings is dedicated to providing healthier, everyday refreshment through science and innovation. CELH serves customers in the United States and internationally.
Celsius Holdings has an expected revenue and earnings growth rate of 55.3% and 50%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 1% over the last 30 days.
At present, the stock price of CELH is trading at a massive 63.5% discount to its 52-week high. The average short-term price target of brokerage firms represents an increase of 15.3% from the last closing price of $36.09. The brokerage target price is currently in the range of $26 to $58. This indicates a maximum upside of 60.7% and a downside of 28%.
Zacks Rank #2 United Natural Foods has continued to demonstrate strong growth and operational discipline, supported by wholesale momentum and sustained demand for natural and organic products. UNFI’s strategic initiatives such as customer base expansion, network optimization, investment in automation, and adoption of lean management practices have driven notable gains in efficiency, cost savings and service quality.
UNFI raised its full-year fiscal 2025 outlook following solid second-quarter results. That said, challenges remain in the form of softness in the retail, pressure on gross margins due to product mix and pricing strategies, and higher industry competition. UNFI’s continued focus on execution, digital capabilities, margin improvement and retail repositioning will be critical to sustaining momentum and long-term shareholder value creation.
United Natural Foods has an expected revenue and earnings growth rate of 1.9% and more than 100%, respectively, for the current year (ending July 2025). The Zacks Consensus Estimate for current-year earnings has improved 7.9% over the last 60 days.
At present, the stock price of UNFI is trading at a 42.1% discount to its 52-week high. The average short-term price target of brokerage firms represents an increase of 20.8% from the last closing price of $24.46. The brokerage target price is currently in the range of $25 to $33. This indicates a maximum upside of 34.9% and no downside.
Zacks Rank #2 Utz Brands is engaged in manufacture, marketing, and distribution of snack foods in the United States. UTZ offers various salty snacks, including potato chips, tortilla chips, pretzels, cheese snacks, pub/party mixes, pork skins, ready-to-eat popcorn, and other snacks which include salsa and dips, as well as seasonal favorites.
UTZ sells its products under the Utz, Zapp’s, On The Border, Golden Flake, and Boulder Canyon, TORTIYAHS!, Hawaiian, Bachman, Tim’s Cascade, Dirty Potato Chips, TGI Fridays, and Vitner’s brands through DSD and direct-to-warehouse distribution methods, retailers or via distributors, supermarkets, mass merchandisers, club warehouses, convenience stores and other large-scale retailers, merchants, distributors, brokers, wholesalers, and Ios.
Utz Brands has an expected revenue and earnings growth rate of 1.2% and 10.4%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 3.7% over the last 60 days.
At present, the stock price of UTZ is trading at a 31.1% discount to its 52-week high. The average short-term price target of brokerage firms represents an increase of 32% from the last closing price of $13.81. The brokerage target price is currently in the range of $16 to $20. This indicates a maximum upside of 44.8% and no downside.
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United Natural Foods, Inc. (UNFI) : Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).
