Chefs’ Warehouse stock could deliver 25% returns for investors, Barron’s says

Wealthy diners are still spending on Wagyu beef, stone crab, and other upscale menu items at restaurants even as food prices rise. Chefs’ Warehouse caters to this crowd, and that’s good news for the stock, Evie Lu writes in this week’s edition of Barron’s. The company plans to grow distribution capacity by nearly 60% from 2022 to 2026, over half of which has been completed, the writer notes, adding that the company’s fast expansion has come at a cost, namely margin compression. Chefs’ Warehouse tends to purchase companies with relatively low profit margins to gain entry to a market. Shrinking margins should reverse soon, however. At the midpoint of $42, the stock would be up more than 25%, the publication adds.