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Investing.com -- UBS began coverage of several packaged food companies with a cautious outlook, citing softening consumer trends and questions around margin expansion.

The brokerage issued a Sell rating on Freshpet, while initiating McCormick (NYSE:MKC) and Conagra with Neutral ratings.

Freshpet Inc (NASDAQ:FRPT)

UBS initiated coverage of Freshpet with a Sell rating and a $65 price target, saying top-line growth expectations are too optimistic.

The firm sees downside to consensus sales forecasts through 2027 and flagged weakening consumer behavior indicators such as lower purchase frequency and flat repeat rates. UBS expects revenue growth to average 13% annually through 2027, well below management’s 23% target.

McCormick&Co 

UBS started McCormick at Neutral with an $83 price target, citing longer-term volume growth potential but near-term risks to top-line performance.

While the brokerage acknowledged secular tailwinds such as rising at-home cooking and demand for spice, it flagged softness in the company’s consumer and flavor solutions segments.

UBS sees limited visibility on margin improvement, particularly with tariffs and input costs still in flux. Its earnings estimates for 2025 and 2026 are 1% below consensus, and while the valuation is slightly discounted relative to peers, UBS views that as largely justified.

Conagra Brands (NYSE:CAG) Inc  

Coverage of Conagra also began at Neutral, with a $22 target.

UBS said the company’s growth is likely to remain below its low single-digit target in the near term, especially in categories like frozen and sweet snacks, where market share pressures persist.

It expects 0.6% organic growth in fiscal 2026, in line with consensus, and sees a mid-single-digit decline in earnings that year due to ongoing cost inflation and higher spending. While valuation appears low, UBS said shares are unlikely to re-rate without a meaningful improvement in fundamentals.

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