Freshpet shares could see big gains as demand for fresh and frozen pet food grows, according to Goldman Sachs. Analyst Jason English upgraded Freshpet to buy from neutral, saying in a Tuesday note to clients that growing interest in the fresh pet food category will drive customers to the Freshpet brand in grocery stores. "We believe the cold-state pet food market is on the cusp of an inflection," English wrote. New competitive manufacturers and retailers will drive a surge of awareness and interest in the category, "thereby driving traffic to a part of the store where Freshpet's price point is beginning to look like a better value in context of the super-premium frozen products being launched," the note said. Goldman hiked its Freshpet price target to $136 per share from $111. The new price target implies 34% upside from Tuesday's closing price for the stock. Over the past year, capacity constraints weighed on the stock, which was unable to meet demand for its products in grocery stores. The company's management has since ramped up capacity. Shares for Freshpet jumped 3.4% in Wednesday premarket trading. —CNBC's Michael Bloom contributed to this report.
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Freshpet shares could see big gains as demand for fresh and frozen pet food grows, according to Goldman Sachs.