US Foods’ Q4 Results as Expected, So All Eyes on New Long-Term Strategy; Shares Modestly Undervalued

As US Food’s 2021 results were in line with our forecast, we found the more interesting news to be the release of the firm’s three-year plan, including 2024 targets of $1.7 billion in adjusted EBITDA and EPS of $3.40, not far from our marks of $1.6 billion and $3.38 ($3.46 once we reverse our prior assumption that the U.S. corporate tax rate would increase in 2022). Even so, we think it will be difficult for the firm to reach its organic growth goals, as our targets assume ongoing tuck-in acquisitions, while guidance does not.