What Happened?
Shares of pet food company Freshpet (NASDAQ: FRPT) fell 7.9% in the morning session after Bank of America Securities downgraded the stock and the company announced its Chief Financial Officer was departing.
The downgrade came from analyst Bryan Spillane, who lowered Freshpet's stock rating to 'Neutral' from 'Buy' and cut the price target by over 25% from $81.00 to $60.00. Adding to investor concerns, the company announced that Chief Financial Officer Todd Cunfer had decided to accept an opportunity outside the company. Ivan Garcia, Vice President of Finance, was named Interim CFO to support the transition while Freshpet began a search for a permanent successor. The departure of a key executive triggered concerns about corporate stability and added to a feeling of uncertainty surrounding the company's future direction.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Freshpet? Access our full analysis report here.
What Is The Market Telling Us
Freshpet’s shares are very volatile and have had 27 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 28 days ago when the stock dropped 6.5% on the news that UBS maintained its 'Sell' rating and significantly lowered its price target for the company's shares. UBS analyst Bryan Adams cut the price target on Freshpet to $48.00 from a previous $65.00, a substantial reduction of over 26%. While the 'Sell' rating was maintained rather than newly initiated, the drastic price target adjustment highlights the firm's cautious approach towards the stock's future market performance.
Freshpet is down 65.9% since the beginning of the year, and at $49.24 per share, it is trading 69.7% below its 52-week high of $162.59 from January 2025. Investors who bought $1,000 worth of Freshpet’s shares 5 years ago would now be looking at an investment worth $410.24.
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