Vital Farms initiated with a Buy at DA Davidson

DA Davidson initiated coverage of Vital Farms with a Buy rating and $21 price target. The quality of the company’s growth, evidenced by a two year sales stack that has held steady through COVID-19, avian influenza, and more recently broader volume softness across Food, has been highly underappreciated by the market, the analyst tells investors in a research note. The firm adds that despite playing in a volatile category, Vital’s velocity growth is comparable to publicly traded Food peers in value added categories, which is underscoring the company’s brand’s traction, validating its considerable whitespace opportunity, and highlighting the stock’s “sharp valuation disconnect”.