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Investing.com - B.Riley downgraded Traeger Inc. (NYSE:COOK) from Buy to Neutral on Wednesday, while lowering its price target to $1.50 from $3.00, citing prolonged sales weakness across key product categories. The stock, currently trading at $1.38, has declined over 51% in the past year, according to InvestingPro data.
The downgrade follows a negative re-inflection in Traeger’s grill sales, which represent over 50% of total revenue. Grill sales declined 22% year-over-year in the second quarter, with B.Riley expecting this downward trend to continue through at least the fourth quarter of 2025. This aligns with InvestingPro data showing overall revenue decline of 2.55% in the last twelve months, with analysts anticipating further sales weakness ahead.
Accessories, accounting for more than 20% of Traeger’s sales, are also showing persistent weakness. B.Riley projects double-digit declines in this segment for at least six consecutive quarters, extending from the third quarter of 2024 through the fourth quarter of 2025.
While B.Riley acknowledges positive margin initiatives, including Project Gravity which is expected to generate approximately $30 million in annualized run-rate savings by year-end 2026, these measures may not offset the negative impact of tariffs on sales volume.
The firm also expressed concern about Traeger’s debt load, which is approaching six times trailing twelve-month EBITDA as of the second quarter estimate, and sees limited catalysts for share price improvement over the next six months.
In other recent news, Traeger Inc. has reported financial results for the second quarter of 2025, which fell short of market expectations. The company posted an earnings per share (EPS) of -$0.01, compared to the anticipated $0.05, representing a 120% negative surprise. Revenue came in at $145.5 million, missing the forecasted $166.49 million by 12.61%. Traeger also reported a 13.6% decline in sales for the quarter, a significant drop compared to Telsey’s forecast of a 0.2% decrease and the FactSet consensus estimate of a 1.2% decrease. EBITDA was reported at $14.3 million, which was below both Telsey’s expectation of $23.3 million and FactSet’s $24 million projection. In light of these results, Telsey has lowered its price target for Traeger to $1.75 from $2.00, while maintaining a Market Perform rating. These developments highlight the challenges Traeger is currently facing in meeting market expectations.
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