The Chefs' Warehouse: An Appetizing Stock With Strong Margin Expansion Ahead
Source: SeekingAlpha
2025-01-23 13:59:29 ET
Summary
- The Chefs’ Warehouse is a specialty food distributor supplying high-end steaks, seafood and other premium products to fine-dining restaurants, gourmet stores and luxury hotels.
- The US foodservice distribution market is very large at $354 billion and provides ample scope to grow.
- EBITDA margins to improve to 6.5-7% by FY28 (vs 5.6% for FY23). I expect EBITDA to reach $323 million by 2028, growing at a CAGR of 11% (2024E-2028E).
- I believe the strong uptick in profitability outlook is not yet fully reflected in the stock price.
- While the stock has surged 68% over the past year, it still trades at 13x forward EBITDA (vs. peak of 17.5x in Feb 2023). My target price is $63.
Investment Summary
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The Chefs' Warehouse: An Appetizing Stock With Strong Margin Expansion Ahead
The Chefs' Warehouse Inc.
NASDAQ: CHEF
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The Chefs' Warehouse, Inc. to Participate in the UBS Global Consumer & Retail Conference
CHEF Stock Data
$2,661,648,616
36,006,711
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87
N/A
Retailers - Staples
Consumer Staples
US
Ridgefield
