Canaccord maintains Holley stock buy rating, $6 price target

On Tuesday, Canaccord Genuity analysts, led by Brian McNamara, reaffirmed their confidence in Holley (NYSE:HLLY), maintaining a Buy rating and a $6.00 price target for the company’s shares, representing significant upside from the current price of $2.57. The endorsement follows a series of investor meetings in Boston, MA, with Holley’s top executives, CEO Matthew Stevenson and CFO Jesse Weaver. According to InvestingPro data, the company maintains a "Fair" overall financial health score, with particularly strong metrics in relative value and cash flow management.

During last week’s meetings, the management team conveyed their optimism about Holley’s future, having invested considerable effort into restructuring and professionalizing the business. They anticipate these changes to start paying off with a return to growth in 2025. According to the analysts’ earlier reports this month, Holley’s guidance for 2025 indicates an expected organic growth of 2.5% at the midpoint, with sales remaining flat in the first half of the year and increasing by mid-single-digit percentages in the second half. While the company reported a revenue decline of 8.7% in the last twelve months, InvestingPro analysis suggests net income growth is expected this year, with analysts forecasting a return to profitability.

The Canaccord Genuity team believes that Holley’s stock holds significant potential for appreciation in the coming year, potentially outperforming other stocks within their coverage. The reiterated Buy rating and price target reflect their continued positive outlook on the company’s prospects.

The analysts’ note highlighted the strategic efforts by Holley’s management to position the company for growth, indicating that these initiatives are expected to bear fruit in the near future. The guidance provided by the company suggests a steady improvement in performance as the year progresses, with a stronger second half anticipated.

Investors and market watchers will be keeping a close eye on Holley’s performance, as the company aims to validate the confidence expressed by Canaccord Genuity through its operational results in the forthcoming months.

In other recent news, Holley Inc. reported a strong performance in its fourth-quarter 2024 earnings, surpassing earnings per share (EPS) expectations with an EPS of $0.11 compared to the forecasted $0.01. The company also exceeded revenue estimates, posting $140.1 million against the anticipated $137.55 million. Despite a cautious sales forecast for 2025, Holley expects EBITDA growth due to strategic initiatives aimed at cost savings and margin improvements. DA Davidson maintained a Neutral rating with a $3.00 price target, noting Holley’s conservative sales guidance for 2025 but acknowledging the company’s efforts to enhance operational efficiency. Benchmark analysts reaffirmed a Buy rating with a $5.00 price target, highlighting Holley’s focus on core products and strategic reinvestment amid softer demand. Holley is also expanding its market reach by launching 88 new products and entering the Mexican market, contributing to its future growth strategy. The company’s disciplined capital management is expected to support free cash flow, with ongoing efforts to reduce debt. These developments reflect Holley’s strategic direction and market resilience as it navigates a challenging macroeconomic environment.

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