Is US Foods Holding Corp. (USFD) One of The Best Defensive Stocks to Buy on Strong Financials?

US Foods Holding Corp. (NYSE:USFD) is one of the best defensive stocks to buy amid geopolitical tensions. On June 1, Piper Sandler reiterated a Neutral rating on US Foods Holding Corp. (NYSE:USFD) and lowered the price target to $88 from $103.

Is US Foods Holding Corp. (USFD) One of The Best Defensive Stocks to Buy on Strong Financials?

The price target cut comes amid concerns that the retailer will feel the brunt of weak traffic in the chain-restaurant industry. Consequently, the research firm has reduced its organic case growth estimate while also increasing its discount rate assumption to 8.75% from 8.25% to align with distribution peers.

Amid the concerns, US Foods accelerated its year-over-year independent restaurant case growth in the first quarter as it also gained share with its target customer types. The company also posted a 15% adjusted diluted earnings per share growth of $0.78 amid a deteriorating macro environment. Net sales in the quarter were also up by 2.8% to $9.6 billion.

For the full year, US Foods is projecting net sales growth of 4% to 6%, with adjusted EBITDA growth of 9% to 13%. Earnings per share are also expected to grow by between 18% and 24%.

US Foods Holding Corp. (NYSE:USFD) is a massive food service distributor that supplies food and kitchen essentials to approximately 250,000 locations, including independent restaurants, healthcare facilities, hotels, and educational institutions.

While we acknowledge the risk and potential of USFD as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than USFD and that has 10,000% upside potential, check out our report about this cheapest AI stock.

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