EUR/USD likely to find a peak near 1.25: UBS
On Monday, DA Davidson adjusted its outlook on Utz Brands shares (NYSE:UTZ), reducing the price target from the previous $18.00 to $16.00. Despite the change, the firm maintained a Neutral rating on the stock. According to InvestingPro data, the stock is currently trading near its Fair Value, with analyst targets ranging from $16 to $23. The modification reflects a cautious stance towards the broader snacking sector, which is also evident in the analyst’s estimates that fall below the consensus.
Analyst Brian Holland of DA Davidson highlighted that while Utz Brands has shown commendable management efforts in controlling share and productivity, leading to EBITDA growth within the initial fiscal year 2024 guidance, the company has not met expectations in terms of revenue. With an EBITDA of $129.9 million and a gross profit margin of 35.1%, the company maintains stable operational metrics despite challenging conditions. Holland noted, "Utz is case in point. We commend management for controlling the controllables (share, productivity), yielding EBITDA growth at the midpoint of initial FY24 guide despite underdelivering on the top line."
Utz Brands’ stock performance has declined by approximately 25% over the past year, with the stock currently trading at $14.10. InvestingPro analysis reveals the company has maintained its dividend growth for five consecutive years, offering a yield of 1.73%. Holland acknowledged that there is favorable risk-reward for investors who believe that food multiples will recover. However, he expressed skepticism about the likelihood of such a recovery in multiples. For deeper insights into Utz Brands’ valuation and growth prospects, investors can access comprehensive analysis through InvestingPro’s detailed research reports, available for over 1,400 US stocks.
The analyst’s comments suggest that the performance of snack stocks like Utz is closely tied to their ability to demonstrate sustainable growth in revenue. Holland’s outlook indicates that, although Utz Brands has managed certain aspects of its business well, the broader market conditions and the company’s revenue performance have influenced the firm’s cautious position. InvestingPro data shows the company’s revenue declined by 2% in the last twelve months, though net income is expected to grow this year.
The revised price target by DA Davidson implies a level of uncertainty regarding the future performance of Utz Brands, particularly in relation to the broader food and snacking industry’s valuation trends. The firm’s Neutral rating suggests that investors may want to weigh these factors when considering Utz Brands as a potential investment.
In other recent news, Utz Brands reported its fourth-quarter earnings for 2024, surpassing expectations with an earnings per share (EPS) of $0.22, compared to the forecast of $0.20. However, the company’s revenue did not meet expectations, recording $341 million against the anticipated $354.8 million. Despite the revenue shortfall, Utz Brands continues to focus on productivity improvements, aiming for $150 million in gains from 2024 to 2026. The company also plans to expand its distribution and optimize its supply chain network. DA Davidson maintained a Neutral rating on Utz Brands, with an unchanged price target of $18.00, noting that while the company’s adjusted EBITDA met expectations, revenue fell short. Analyst Brian Holland highlighted a slowdown in salty snack volumes and overall weakening sales trends in the snack category. He suggested that while Utz Brands achieved its EBITDA targets through productivity gains, broader market indicators warrant a cautious outlook. The company is targeting an 80 basis point expansion in EBITDA margins by 2025, with ongoing investments in supply chain automation and capacity expansion.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.