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On Friday, Canaccord Genuity maintained a Buy rating on Traeger Inc. (NYSE:COOK), but reduced the price target to $5 from the previous $7. The adjustment followed Traeger’s fourth-quarter earnings release, which showcased sales slightly above Canaccord Genuity’s and consensus estimates. According to InvestingPro data, Traeger’s current market capitalization stands at $282.1 million, with the stock trading at $2.16. The company appears undervalued based on InvestingPro’s Fair Value analysis, though investors should note that three analysts have recently revised their earnings expectations downward. The company’s grills segment experienced significant year-over-year growth of 30%, outperforming Canaccord Genuity’s expectation of 17% and the general market prediction of 9%.
Traeger’s consumables also exceeded expectations, while the company did not identify private label competition as a concern this quarter. However, the accessories division fell short, with increased marketing investments in MEATER not generating the anticipated increase in demand. Despite this, Traeger’s gross margin surpassed consensus estimates by approximately 50 basis points and saw a year-over-year expansion of 407 basis points. This improvement was attributed to supply chain efficiencies and reduced transportation costs, which contributed to higher than expected adjusted EBITDA and EPS figures. InvestingPro data shows the company’s gross profit margin now stands at 42.29%, with EBITDA reaching $53.38 million in the last twelve months. For deeper insights into Traeger’s financial health and detailed analysis, subscribers can access the comprehensive Pro Research Report, available exclusively on InvestingPro.
The company’s management has projected that the grill market will remain stable or potentially grow by 1% to 2%, following three successive years of decline. Although Traeger’s guidance was below market expectations, Canaccord Genuity noted that this conservative outlook is typical for the company. However, analysts were surprised that the guidance did not factor in the potential impact of tariffs.
In light of these details, Canaccord Genuity reaffirmed its Buy rating for Traeger Inc. but adjusted the price target downward to reflect the lowered estimates. The new target is set at $5, a decrease from the prior target of $7.
In other recent news, Traeger Inc. reported its fourth-quarter 2024 earnings, surpassing expectations with an earnings per share (EPS) of $0.01, compared to a forecast of -$0.0015. The company achieved a revenue increase to $169 million, marking a 3% rise year-over-year, and a significant 41% boost in adjusted EBITDA compared to the previous year. Despite these positive results, the company offered a cautious outlook for 2025, with revenue guidance ranging from $595 million to $615 million, reflecting potential growth or decline. Additionally, Traeger launched a new product line and expanded retail partnerships, while also preparing for potential tariff impacts and supply chain diversification.
Jefferies analyst Randal J. Konik adjusted Traeger’s stock price target to $2.25 from $2.75, maintaining a Hold rating on the stock. This adjustment follows Traeger’s fourth-quarter results, which exceeded Wall Street estimates for both revenue and earnings, driven by strong Grill sales and improved profitability. The company’s Consumables segment showed recovery and is expected to benefit from a new distribution deal with Walmart (NYSE:WMT). However, challenges persist in the Accessories division, particularly with decreased sales of the MEATER product. Management has provided a cautious outlook due to market uncertainties, despite efforts to drive market share gains.
These developments reflect Traeger’s strategic initiatives and market positioning as the company navigates a competitive and uncertain environment.
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