Freshpet's (FRPT) revenue growth reached the lowest point in Q4 and is poised to reaccelerate sequentially, with investors underestimating opportunity in Walmart (WMT) and Amazon.com's (AMZN) expansion in same-day grocery delivery services, Morgan Stanley said in a note Tuesday.

The investment firm forecast net sales growth of 10.5%, above the company's 2026 guidance range for 7% to 10% and the 9.1% consensus, citing several factors that could drive potential upside.

Morgan Stanley pointed to Freshpet's increased marketing investment, sharpened entry price points, an expanded distribution deal with Tractor Supply (TSCO), and a stronger emphasis on e-commerce, which could lead to alignment with the expansion of same-day grocery delivery services by Amazon and Walmart.

In addition, the firm said there is less competitive risk from General Mills (GIS) after the weak market response to its fresh dog food.

Morgan Stanley upgraded Freshpet to overweight from equal-weight, and raised the price target to $90 from $71.

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