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Investing.com - CFRA has raised its price target on Topgolf Callaway Brands (NYSE:MODG) to $9.00 from $7.00 while maintaining a Hold rating on the stock. According to InvestingPro data, MODG currently trades at $9.03, with a Financial Health Score of ’FAIR’ and a current ratio of 2.12x, indicating strong liquidity position.
The research firm based its higher target on 10.8x its 2026 adjusted EBITDA estimate, which is slightly lower than the company’s three-year average forward EV/EBITDA multiple of 11.1x. CFRA cited "troughing fundamentals and low expectations" as factors in its decision. The company’s current EV/EBITDA stands at 11.63x, with EBITDA reaching $495.4 million in the last twelve months.
CFRA maintained its earnings per share estimates for Topgolf Callaway Brands at -$0.04 for 2025 and $0.20 for 2026. The firm noted that MODG shares have rebounded 50% in just over a month as investors anticipate the Topgolf spin-off and responded positively to the sale of Jack Wolfskin. This aligns with InvestingPro data showing strong returns over the last month and quarter, though the stock remains below its Fair Value estimate.
Despite the price target increase, CFRA kept its Hold rating due to uncertainty surrounding the spin-off and what it considers a full valuation. The research firm expressed concern about the Golf Equipment business’s manufacturing exposure to Asia, which it believes puts margins at risk in the new tariff environment.
CFRA characterized earnings expectations for Topgolf Callaway Brands as "muted" and stated that the stock’s valuation "trades in a fair range."
In other recent news, Topgolf Callaway Brands reported a strong Q1 2025 with an earnings per share of $0.11, surpassing the expected loss of -$0.04. Revenue reached $1.09 billion, aligning with forecasts but showing a 5% year-over-year decrease. Despite this, the company maintained its full-year revenue guidance, projecting between $4 billion and $4.185 billion. KeyBanc Capital Markets reiterated a Sector Weight rating on the company, noting concerns over a 12% decline in the soft goods segment and uncertainty about the timing of a potential business separation. Meanwhile, Texas Capital Securities initiated coverage of Topgolf Callaway Brands with a Hold rating, citing challenges such as decreased corporate event spending and consumer spending headwinds. Additionally, shareholders approved an amended 2022 Incentive Plan, increasing the number of shares available for issuance by 13.5 million. These developments indicate ongoing strategic adjustments and financial recalibrations within the company.
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