Shares of Freshpet (FRPT 0.88%) climbed on Wednesday following bullish analyst remarks. As of 1:15 p.m. EST today, the high-end pet food company's stock price was up more than 8%.
D.A. Davidson analyst Brian Holland reiterated his buy rating on Freshpet's stock and boosted his price forecast from $172 to $194. Holland's new estimate represents potential gains for investors of roughly 25% from the stock's current price near $155.
Holland praised Freshpet's fourth-quarter results. Sales for the leader in fresh pet food surged 28.5% to $84.5 million. Better still, the company said it expects sales to rise by 35% to more than $430 million in 2021.
Holland, in turn, said Freshpet's accelerating revenue growth highlights its "increasingly compelling runway" as it adds production capacity and expands its retail footprint.
With many people longing for companionship during the COVID-19 crisis, pet adoptions have soared. The U.S. pet care market grew to a whopping $99 billion in 2020, according to the American Pet Products Association.
Within this booming market, more-natural and healthier pet food is one of the fastest-growing segments. Freshpet's strong brand and vast retail distribution network give it a powerful competitive edge in the premium pet food category. If it can deliver on its growth projections -- and multiple signs suggest that it will -- the stock price could easily hit Holland's $194 price target in the year ahead.