Tonix Pharmaceuticals stock halted ahead of FDA approval news
On Thursday, Jefferies analyst Randal Konik upgraded Topgolf Callaway Brands (NYSE:MODG) stock rating from Hold to Buy, with an increased price target set at $13.00, up from the previous $11.00. The upgrade comes as the stock, currently trading at $7.86, has declined over 47% in the past six months. According to InvestingPro analysis, MODG appears undervalued relative to its Fair Value, suggesting potential upside opportunity.
Konik's assessment is based on a proprietary sum-of-the-parts (SOTP) analysis which indicates that Callaway shares are undervalued in comparison to its competitor, GOLF, especially given Callaway's faster growth over a three-year period. Furthermore, the analysis suggests that the market is currently not attributing any value to Topgolf's contribution to the company.
Konik notes that, although Topgolf's fundamentals are currently weak and Topgolf Callaway Brands has experienced issues with execution, the stock seems to be oversold. InvestingPro data shows the company maintains a healthy current ratio of 1.93, indicating strong ability to meet short-term obligations.
Get access to 8 more key ProTips and comprehensive financial analysis with an InvestingPro subscription. The analyst points out that with a potential separation on the horizon, and the SOTP valuation being approximately twice the current share price, Topgolf Callaway Brands presents a compelling value proposition.
The Jefferies analyst acknowledges that there have been recent doubts about the management's capabilities, but he counters this by highlighting the management's historical depth of understanding of the golf equipment market. He also cites robust tailwinds in the golf industry as a positive factor for the company's future performance.
Konik's optimistic outlook for Topgolf Callaway Brands is rooted in the belief that the market has not fully recognized the company's growth prospects and inherent value, especially when considering the separate components of the business. This upgrade by Jefferies to a Buy rating reflects a confidence in the company's potential to overcome its current challenges and capitalize on the positive trends within the golf industry.
With analyst price targets ranging from $8 to $16, and the company's $4.2 billion in revenue, investors seeking deeper insights can access the full MODG analysis through InvestingPro's comprehensive research report, available along with 1,400+ other detailed company analyses.
In other recent news, Topgolf Callaway Brands Corp. reported surpassing third-quarter consensus estimates with revenues of $1.01 billion, a slight decrease from the previous year. The company adjusted its full-year revenue guidance to approximately $4.2 billion. Analyst firm CFRA maintained its Buy rating on Topgolf Callaway, while Truist Securities revised its price target for the company from $16.00 to $14.00, maintaining a Buy rating as well.
Furthermore, Topgolf Callaway announced the divestiture of its mobile game subsidiary, World Golf Tour, LLC (WGT), as part of a strategic plan to innovate and enhance the golfing experience in its more than 100 Topgolf venues. The company has not disclosed the terms of the sale or the buyer but emphasized that the move aligns with its strategy to focus on its main areas of expertise and provide better services to its customers.
Lastly, the company announced plans for approximately five new venue openings in 2024 and is considering a potential spin-off of Topgolf targeted for mid-2024 completion.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.