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Chefs’ Warehouse (NASDAQ:CHEF) is on watch for a Monday bounce after the specialty food distributor was profiled favorably by Barron’s over the weekend. The publication sees upside for the company that distributes food to more than 44K restaurants, with a heavy tilt toward luxury hotels and country clubs that offer fine-dining services. Of note, Chefs’ Warehouse (CHEF) added more distribution centers to its network in key markets such as California, Florida, Arizona, and Texas in anticipation of booming demand. Looking ahead, CHEF plans to grow distribution capacity by nearly 60% from 2022 to 2026, over half of which has been completed. While the growth is expected to come with some near-term pain, margins are seen expanding before too long due to the company’s scale and cost leveraging.
Chefs’ Warehouse (CHEF) is viewed favorably on Wall Street, with all eight firms covering the stock in the bull camp. “These guys are distributing really high-end steaks, seafood, olive oils, cheeses, and all sorts of premium products,” noted BTIG analyst on CHEF. “They cater to customers with the top 10% income in the country, where your average restaurant check is $80 to $100, if not more,” he noted. Meanwhile, Benchmark has CHEF slotted as one of its top pick for 2024. Also working in the stock’s favor, the Seeking Alpha momentum factor grade on CHEF is a solid A.
