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Investing.com -- B. Riley downgraded Traeger Inc to Neutral from Buy and cut its price target to $1.50 from $3, saying the grill maker’s turnaround will take longer than expected as tariffs and weak demand weigh on sales.
Grill sales, which account for more than half of revenue, fell 22% year-over-year in the second quarter and are expected to keep declining through at least the fourth quarter of 2025, the brokerage said.
Price increases to offset tariffs are hurting volumes, while accessories sales, more than a fifth of total revenue, have logged double-digit declines for four straight quarters and are likely to stay weak through late 2025.
B. Riley noted that while cost-cutting efforts, including “Project Gravity,” are on track to generate about $30 million in annualized savings by the end of 2026, the company’s high debt load, near six times trailing 12-month EBITDA, limits flexibility.
It said investors will likely need to see a sustained sales rebound for the stock to break above its recent $2-$3 trading range.
The firm also pointed to reduced marketing spending as a constraint on growth. Traeger’s advertising budget was $20 million in 2024, down from $58 million in 2021, with B. Riley expecting little increase until at least 2026.
While EBITDA has improved from 2022 lows due to better margins from easing freight costs, B. Riley said top-line pressure outweighs near-term positives, with the 2026 retail selling season now the key potential upside driver.