What Happened?
Shares of pet food company Freshpet (NASDAQ:FRPT) fell 6.5% in the morning session after 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.
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, it’s free.
What Is The Market Telling Us
Freshpet’s shares are very volatile and have had 24 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 8 days ago when the stock dropped 3.6% on the news that the major indices continued to retreat amid profit-taking and renewed concerns about tariffs. Investors reacted to a federal court ruling that most of President Trump's global tariffs were illegal, raising uncertainty over trade policy and the fiscal impact of potential refunds. Rising Treasury yields added to the pressure, with the 10-year climbing above 4.2% and the 30-year nearing 5%, intensifying worries about stretched equity valuations. September's historically weak track record for stocks further dampened sentiment, leaving traders cautious ahead of the jobs report later in the week and the Federal Reserve's upcoming rate decision.
Freshpet is down 62.9% since the beginning of the year, and at $53.50 per share, it is trading 67.1% 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 $497.03.
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