Traeger shares price target raised by RBC on strong Q2 growth

On Thursday, RBC Capital updated its outlook on shares of Traeger Inc. (NYSE:COOK), raising the price target to $2.50 from the previous $2.00, while retaining a Sector Perform rating on the stock. The adjustment follows Traeger's reported revenue growth in the grill segment for the second quarter, which surpassed both Wall Street and company expectations, contributing to a significant upward revision of the management's full-year segment forecast.

Traeger's recent financial performance has demonstrated a robust sequential improvement, particularly in grill sales, which are a core part of the company's business. Despite existing discretionary spending pressures and underwhelming accessories revenue, consumer demand for Traeger's products appears to be resilient when pricing is favorable. This trend has been a key driver behind the revised expectations.

The company's management has also projected a more appealing full-year profitability outlook, thanks to unexpected margin expansion during the quarter. This development has been a contributing factor to RBC Capital's decision to increase the price target for Traeger Inc. The firm's analyst highlighted these points, noting the positive shift in the company's financial trajectory.

RBC Capital's maintained Sector Perform rating reflects a neutral stance on the stock, suggesting that Traeger's current market performance is in line with the analyst's expectations for companies in the same sector. The new price target of $2.50 indicates a modest increase in the analyst's valuation of the company's shares.

The updated price target and performance rating by RBC Capital comes as a direct response to Traeger's second-quarter results and revised full-year outlook, indicating a nuanced view of the company's financial health and market position.

In other recent news, Traeger Inc. has been the subject of several significant developments. Following the announcement of Q2 results that showed a 2% growth in grill sales, Canaccord Genuity raised its price target for the company from $4.00 to $5.00, maintaining a Buy rating.

Traeger's gross margin of 42.9% exceeded expectations, resulting in improved adjusted EBITDA and EPS. The company also revised its full-year 2024 guidance upwards, now anticipating a 10% increase in grill sales for the second half of the year.

In governance matters, Traeger amended its corporate charter, aligning with Delaware's General Corporation Law. The company's stockholders approved an amendment allowing for the exculpation of company officers, providing them protection under certain conditions.

The annual meeting also saw the election of Class III directors and the ratification of Ernst & Young LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2024.

Analysts from B.Riley maintained a Buy rating on Traeger with a price target of $3.50, following a non-deal roadshow. They highlighted the company's potential for EBITDA improvement and the significance of its enhanced product placement in Home Depot (NYSE:HD) stores.

Traeger's Q1 2024 results revealed a revenue of $145 million, a 5% decrease from the previous year, but met adjusted EBITDA expectations at $24 million. These are recent developments and do not predict future performance.

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