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On Friday, Telsey Advisory Group adjusted its outlook on Traeger Inc. (NYSE: COOK), reducing the 12-month price target from $2.50 to $2.00, while keeping a Market Perform rating on the company’s shares. According to InvestingPro data, the stock currently trades at $1.48, down over 52% in the past six months, with a current market cap of $193 million. The firm cited potential industry headwinds and tariff impacts as reasons for the adjustment, though it acknowledged Traeger’s efforts to drive growth through brand marketing and product innovation.
Telsey’s analysis highlighted Traeger’s strategies for outperforming the industry, including raising brand awareness, engaging customers, launching new product lines such as Woodbridge and Flatrock, and expanding its consumables business and international presence. While the company maintains strong liquidity with a current ratio of 1.99, and InvestingPro analysis indicates net income growth expectations for this year, the firm anticipates that external economic pressures will challenge the company’s near-term performance.
The revised price target reflects Telsey’s application of an unchanged enterprise value to earnings before interest, taxes, depreciation, and amortization (EV/EBITDA) multiple of approximately 8 times to its updated 2026 EBITDA estimate. The forecast for the company’s EBITDA has been scaled back from $90 million to $85 million, prompting the adjustment in the price target.
Telsey’s stance on Traeger remains cautious, as the firm chooses to stay on the sidelines due to the anticipated impact of tariffs and macroeconomic factors on the company’s operations. The research firm’s decision to maintain the Market Perform rating indicates a neutral outlook on Traeger’s stock performance in the coming year.
The adjustment in the price target is based on Telsey’s analysis of Traeger’s financial prospects and market conditions. The firm’s commentary suggests that while Traeger has potential growth avenues through its marketing and product strategies, the broader economic environment poses significant challenges that investors should consider.
In other recent news, Traeger Inc. reported its first-quarter 2025 earnings, surpassing analysts’ expectations with an earnings per share (EPS) of $0.05, compared to the forecasted $0.04. The company’s revenue for the quarter totaled $143 million, slightly below projections, reflecting a 1% year-over-year decline. Notably, grill sales increased by 13%, reaching $87 million, while the accessories segment saw a significant 27% drop in revenue. Despite the earnings beat, Traeger has withdrawn its financial guidance for fiscal 2025, citing the need to focus on tariff mitigation strategies and inventory management. The company is navigating significant tariff challenges, with grills imported from China subject to a 45% tariff. Traeger is implementing strategic pricing increases and cost-saving measures to offset these impacts. Additionally, the company is prioritizing supply chain diversification to reduce reliance on China by 2026. Analysts from firms such as William Blair have shown interest in the company’s strategic responses to these challenges.
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