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On Thursday, KeyBanc Capital Markets updated its outlook on Acushnet Holdings Corp (NYSE: NYSE:GOLF), increasing the price target to $75 from $70, while reaffirming an Overweight rating on the company’s stock. The golf equipment giant, which generated $2.46 billion in revenue over the last twelve months, has demonstrated solid financial performance with a healthy gross profit margin of 48.3%. The adjustment follows Acushnet’s report of an adjusted EBITDA beat, which slightly exceeded Wall Street’s top-line expectations. According to InvestingPro analysis, the company currently trades slightly above its calculated Fair Value, with a P/E ratio of 18x.
The firm’s analysts highlighted that Acushnet, known for its golf products and accessories, did not revise its FY25 sales and adjusted EBITDA guidance. The company, which maintains a strong financial position with a current ratio of 2.06 and operates with moderate debt levels, provided an estimated FY25 gross tariff impact of approximately $75 million at current rates, breaking down the impact by geography: China at 145%, Mexico/Canada at 25%, and the rest of the world at 10%. Management at Acushnet expects to mitigate more than half of this impact within the year and is confident in fully mitigating the China tariff exposure by FY26.
In addition to the tariff news, Acushnet now anticipates a $15 million foreign exchange (FX) headwind for FY25, which is an improvement from the previously expected $35 million. This improved FX outlook may help offset some of the financial strain from this year’s tariffs, based on current exchange rates.
KeyBanc analysts also pointed to the inherent resilience of the golf industry, noting the sport’s medium-term durability, solid fundamentals, and an increase in global rounds played year-to-date. They believe positive trends and momentum in golf, coupled with long-term dynamics such as a dedicated golfer base, expanding demographics, and the sport’s stickiness, justify a premium valuation for Acushnet Holdings.
The firm’s stance is bolstered by improved visibility in tariff mitigation strategies compared to previous assessments, leading to the raised price target for Acushnet Holdings stock. The company has demonstrated strong shareholder returns, maintaining dividend payments for 9 consecutive years with a current yield of 1.37%. For deeper insights into Acushnet’s financial health and growth potential, investors can access comprehensive analysis and additional ProTips through InvestingPro’s detailed research reports.
In other recent news, Acushnet Holdings reported its first-quarter 2025 financial results, exceeding expectations with an earnings per share (EPS) of $1.62, compared to the forecasted $1.32. The company also reported revenues of $703 million, surpassing the anticipated $697.38 million. Despite these positive results, JPMorgan analyst Kevin Heenan revised Acushnet’s price target from $64 to $57, maintaining an Underweight rating on the stock. This adjustment followed Acushnet’s report of a slight decline in adjusted EBITDA to $138.9 million, which was marginally below the Street’s expectation.
Acushnet’s core EBIT of $114.5 million fell 4% below consensus, influenced by a decrease in gross margin. The company’s gross profit also dipped to $237 million from $242 million in the previous year. The firm did not update its full-year guidance due to ongoing macroeconomic uncertainties and tariff impacts. However, Acushnet anticipates a low single-digit increase in sales for the first half of 2025, with second-quarter revenues projected to rise by 4.7%.
Meanwhile, Acushnet is actively managing tariff impacts and supply chain challenges, with efforts underway to mitigate more than 50% of the projected $75 million gross tariff impact for 2025. The company continues to lead in the golf equipment market, with significant sales growth in golf balls and clubs. Despite these developments, no significant demand changes have been observed in international markets, and the footwear market is expected to normalize in 2025.
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