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On Thursday, Truist Securities adjusted its price target for Acushnet Holdings Corp (NYSE: NYSE:GOLF), the parent company of golf brands such as Titleist and FootJoy, increasing it slightly from $64.00 to $65.00. The firm maintained a Hold rating on the stock. Currently trading at $68.38, Acushnet boasts a solid financial health score of "GOOD" according to InvestingPro analysis, with eight consecutive years of dividend increases and strong profitability metrics.
The adjustment came after Acushnet reported its first-quarter earnings, which were described as decent by Truist Securities. The firm had previously lowered its earnings estimates for Acushnet on April 24, 2023, due to potential risks from consumer spending fluctuations and tariffs. However, following the earnings announcement, the firm felt confident enough to increase the price target by $1.00. With a healthy gross profit margin of 48.3% and revenue growth of 3.15% over the last twelve months, the company continues to demonstrate operational strength.
During the earnings call, Acushnet provided insights into the current retail environment, which appears to be stable and steady, and offered further details on short-term tariff risks. Truist Securities believes that while these risks are present, their impact on Acushnet will likely be manageable.
Despite the first-quarter earnings beat, which did not come as a major surprise to investors given the 11% increase in January-March golf retail sales, Truist Securities expressed caution. The firm highlighted the challenges Acushnet faces in updating its 2025 guidance amid elevated macroeconomic uncertainty and the lack of clarity regarding the tariff environment.
Truist Securities views Acushnet as an attractive long-term total return story but notes that with the stock trading at approximately 13 times the estimated 2025 earnings before interest, taxes, depreciation, and amortization (EBITDA), they advise potential investors to seek a more opportune entry point or a significant catalyst before adopting a more positive stance on the stock.
In other recent news, Acushnet Holdings Corp. reported its first-quarter 2025 financial results, surpassing analyst expectations with an earnings per share (EPS) of $1.62, compared to the forecasted $1.32. The company also exceeded revenue forecasts, reporting $703 million against the anticipated $697.38 million. Despite these positive earnings surprises, Acushnet did not provide updates to its FY25 guidance due to ongoing macroeconomic uncertainties, including tariff impacts. KeyBanc Capital Markets raised its price target for Acushnet Holdings to $75, citing improved visibility in tariff mitigation strategies and resilience in the golf industry. Conversely, JPMorgan revised its price target for Acushnet Holdings to $57, maintaining an Underweight rating due to a marginal decline in adjusted EBITDA and a contraction in gross margin. Acushnet’s management expects a $75 million gross tariff impact for 2025 and aims to mitigate more than half of this impact through strategic sourcing and pricing actions. The company also anticipates a $15 million foreign exchange headwind for FY25, which is an improvement from the previously expected $35 million.
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