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Performance Food Group Company (NYSE:PFGC) announced the promotion of Scott McPherson to Executive Vice President and Chief Field Operations Officer in a move that has some analysts intrigued. In the new role, McPherson will add the responsibility of leading the company’s Foodservice business segment, in addition to his current responsibilities overseeing PFG’s Vistar and Convenience businesses. He will also provide strategic oversight to line operations across Performance Food’s (PFGC) distribution businesses. McPherson will continue to report to Chief Operating Officer Craig Hoskins.
Guggenheim analyst John Heinbockel said McPherson’s promotion is not surprising to the firm and is seen solidifying his positioning as the likely successor to current CEO George Holm. McPherson is said to have a similar employee-oriented, top-line focused philosophy as Holm, as well as has experience as a public company CEO. He is also noted to be young enough to have a reasonably-lengthy tenure.
“We believe he is very capable and has done an excellent job overseeing the Convenience and Vistar segments—which share many attributes—but he has little experience with the critical Foodservice business. The promotion provides this experience with current President and COO Craig Hoskins, along with Mr. Holm, as a valuable mentor.”
Guggenheim does not foresee a CEO transition any time soon. As for the stock, the firm believes a clear, multi-factor path to high single-digit or better EBITDA growth is being undervalued at the current multiples on PFGC. Guggenheim keeps a Buy rating on PFGC and price target of $75.
