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On Tuesday, JPMorgan reiterated its Underweight rating on Acushnet Holdings (NYSE:GOLF) with a steady price target of $64.00. According to InvestingPro data, the stock has declined nearly 13% in the past week and is currently trading at a P/E ratio of 16.92x. With a market capitalization of $3.42 billion, Acushnet maintains strong fundamentals, including a healthy balance sheet with liquid assets exceeding short-term obligations. The firm's analysis followed a report from Golf Datatech™ on rounds played, highlighting a notable decrease in February and year-to-date figures. U.S. rounds played dropped by 11.4% year-over-year in February, a steeper decline than January's 2.9% decrease. Despite these challenges, InvestingPro analysis shows Acushnet has maintained dividend payments for 9 consecutive years and achieved a revenue growth of 3.15% in the last twelve months. (Discover 12 more exclusive InvestingPro Tips for GOLF and access comprehensive financial analysis with a Pro subscription.) Public access rounds experienced a 12.5% year-over-year decline, compared to a 3.6% decrease in January, while private access rounds fell by 8.3%, against a 1.0% decrease the previous month.
The first quarter to date shows rounds played down by 7.9% year-over-year, which is a significant shift from the fourth quarter of 2024, which saw a 1.8% increase. This translates to a compound annual growth rate (CAGR) of +2.5% relative to 2019, moderating from +4.3% in 2024. JPMorgan analysts pointed to unfavorable weather conditions as a primary factor for the decline in February, with regions affected by colder temperatures and increased precipitation showing the largest year-over-year declines. For example, the East North Central region saw an 80.4% decrease in rounds played, New England a 70.1% decrease, and the West North Central region a 68% decrease.
The analysts also noted that February's decline could be partially attributed to tougher year-over-year comparisons, as February 2024 had a 4.9% increase in rounds played, with warmer temperatures contributing to it being the second warmest February in the preceding 30 years according to Weather Trends International (WTI). In contrast, January 2024 experienced a 16.6% decrease in rounds played, coinciding with colder conditions and it being the wettest January in the past 30 years per WTI.
JPMorgan's analysis continues to emphasize the importance of weather as a variable affecting rounds played, consistent with management commentary from the PGA Show on January 22, 2025. The firm highlighted the challenge of matching a favorable start to the season in March and April and an extended end to Fall 2024 in September and October, with year-to-date rounds played tracking below management's flat year-over-year outlook for 2025. InvestingPro data reveals that three analysts have recently revised their earnings downwards for the upcoming period, while the company maintains a moderate debt level with a debt-to-capital ratio of 0.19. Get access to the full Pro Research Report, available for GOLF and 1,400+ other top stocks, offering deep-dive analysis and actionable insights for informed investment decisions.
In other recent news, Acushnet Holdings Corp reported its fourth-quarter 2024 earnings, surpassing expectations with an earnings per share (EPS) of -$0.02, compared to the anticipated -$0.33. The company also exceeded revenue forecasts, posting $455.2 million against the expected $448.76 million, marking an 8% year-over-year increase in Q4 sales. For the full year, Acushnet reported sales of $2.46 billion, representing a 4% gain on a constant currency basis, and an adjusted EBITDA of $412 million, a 7.5% increase. KeyBanc Capital Markets adjusted its financial outlook on Acushnet Holdings, reducing the price target from $80.00 to $77.00, while maintaining an Overweight rating. Despite the price target cut, KeyBanc highlighted Acushnet's business resilience, noting positive trends and momentum within the golf industry. Acushnet's FY25 adjusted EBITDA guidance aligns closely with the consensus, estimated at approximately $413 million, though sales guidance was slightly below expectations due to a $35 million foreign exchange impact. The company plans to continue investing in product innovation and global expansion, with upcoming launches including the Pro V1 golf ball and new putter and iron models.
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