Share Repurchase Program Provides A Floor For The Stock and FCF Reassurance

Research evidence excerpt

Share Repurchase Program Provides A Floor For The Stock and FCF Reassurance

TD Cowen Freshpet

Global Research May 21, 2026

VALUATION METHODOLOGY AND RISKS

Valuation Methodology

Food Producers:

We primarily use forward P/E multiples for our coverage. We analyze past and current valuation

premiums to the peer set and we assign valuation premiums/discounts based on the strength of

the brands, quality of the management team, earnings volatility, and other factors. For some of

our small, fast-growing, unprofitable companies we use EV/EBITDA or EV/Sales

Investment Risks

Packaged food companies in our universe generally operate mature brands that have had

difficulty keeping pace with changing consumer preferences. There is currently elevated

macro risk from weakening consumer buying power, push back from retailer customers on

price increases, and elasticity of demand. Mature companies may need to invest in price to

reinvigorate their volume trends and improve their competitiveness. High-growth companies

may face weaker demand for their premium-priced products.

Risks To The Price Target

Downside Risks Include:

1) Freshpet is a first mover in U.S. fresh, refrigerated pet food, though it’s unlikely to remain the

sole player at scale in brick & mortar retail forever. While we think competitive threats pose a

bigger theoretical risk to the stock today than fundamentals, we acknowledge the stock could

be sensitive as the landscape evolves.

2) Given Freshpet’s high standards, which rival that of human food manufacturers, and pet

parent sensitivity, any material issue related to food safety or product quality could tarnish

brand integrity and significantly affect the business.

3) Mindful of the inherent challenges scaling capacity in the current macro, lack of product