PFG Strengthens Its Strong Foothold in Pizzeria Business, but Food-Service Pressure Pinches Growth

After digesting no-moat Performance Food Group’s first-quarter results, we plan to increase our $42 fair value estimate by a mid-single-digit rate. Our updated valuation reflects higher sales in the Vistar segment (now 19%, from 5.5%, with steeper inflation expectation) and a more optimistic view on PFG’s margin prospects, as its staffing has improved, allowing it to reduce temporary help and overtime costs and thereby enhance productivity. Our fiscal 2023 operating expenses as a percentage of sales should fall 10 basis points to 9.4%.