Freshpet: UBS Downgrades to Sell, PT Lowered to $48 from $65

Freshpet: UBS Downgrades to Sell, PT Lowered to $48 from $65

In a significant development for Freshpet (NASDAQ: FRPT) investors, UBS has downgraded the stock to a "Sell" rating, reducing its price target from $65 to $47. This move follows a broader market sentiment shift amid heightened trade policy uncertainty and rising Treasury yields. The downgrade reflects a cautious stance by UBS analysts, who are advising investors to be wary of potential risks associated with the company's exposure to global trade dynamics.

The decision by UBS comes amidst a federal appeals court ruling that deemed many of President Trump's global tariffs illegal. This ruling has raised concerns over trade policy and the potential fiscal impact of refunds for businesses. The uncertainty surrounding the court's decision and the potential refund process has added to market volatility, with several stocks, including Freshpet, experiencing significant declines in the afternoon session.

Freshpet, a leading provider of fresh, ready-to-eat pet food, has been impacted by these broader market conditions. Analysts at UBS have cited the company's exposure to international trade as a key factor in their decision to downgrade the stock. They have expressed concerns over the potential disruptions in supply chains and the fiscal impact of tariff refunds on the company's financial health.

The market's volatility is further exacerbated by rising Treasury yields. The 10-year Treasury yield climbed above 4.2%, while the 30-year yield neared 5%, reflecting investor concerns over the economic outlook and the potential impact of tariff refunds on the federal budget. These factors have contributed to a more cautious outlook among investors, leading to a sell-off in several sectors, including Freshpet.

Despite the uncertainty, tariff experts advise businesses to remain cautious and not shift their sourcing strategies based on the court's decision. The refund process, if required, could be straightforward for blanket refunds but complex for individual requests. The administration has a backup plan in case the Supreme Court does not uphold the tariffs, including the possibility of using special powers from the Senate.

Freshpet investors should remain vigilant as the situation unfolds. The reality is that tariff volatility has become the new normal, with multiple Section 232 investigations ongoing across various sectors. The court's decision has increased uncertainty for importers, but it is not expected to sink the economy. The deals struck by the White House with other nations are mostly frameworks and are not formalized treaties, so the impact on trade agreements may be limited.

References:
[1] https://www.cnbc.com/2025/09/02/what-trump-court-loss-means-for-billions-in-tariffs-paid-to-government.html
[2] https://www.tipranks.com/stocks/frpt/forecast