Freshpet: Initiating Coverage With No-Moat Rating and $77 Valuation; Shares Fairly Valued

We’re initiating coverage of pet food producer Freshpet with a fair value estimate of $77 per share and a no-moat rating. Our fair value estimate implies about 39 times enterprise value/adjusted EBITDA off our 2024 estimates, with the high multiple reflecting the company’s current growth stage. At the current market price, we think shares are fairly valued. For pet food exposure, Blue Buffalo-owner narrow-moat General Mills looks undervalued, at an 18% discount to our valuation.