Middleby Corp. reported stronger-than-expected 4Q performance as demand for indoor dining is on the rise and commercial foodservice orders improved. Shares of the kitchen and food service equipment maker spiked about 7% Monday’s morning trading session.
Driven by 60% growth in Middleby’s commercial food service segment and 270% growth in its residential kitchen segment, its total backlog at the end of fiscal 2020 reached a record level of $522.7 million versus $307.5 million in the year-ago period.
Middleby (MIDD) posted adjusted earnings of $1.62 per share, which exceeded analysts’ expectations of $1.41 per share.
Revenue decreased 7.4% year-over-year to hit $729.3 million, topping analysts’ estimates of $694.9 million. The year-over-year decline in revenue was mainly due to lower sales in the company’s commercial food service segment which fell to $428.4 million in 4Q from $512.55 million a year ago.
Middleby’s CEO Tim FitzGerald said, “While 2020 was a challenging year for our industry and customers, we have been proactive during this time of uncertainity. Our actions in 2020 have positioned Middleby to lead emerging trends and realize growth across all our platforms.”
FitzGerald added, “In commercial foodservice, orders have consistently improved since the initial impact of COVID-19. There is pent-up demand for indoor dining which has been consistently opening up across the country. This is benefiting our casual dining customers.” (See Middleby stock analysis on TipRanks)
Following the earnings results, Robert W. Baird analyst Mircea Dobre increased the price target on the stock to $161 (10% upside potential) from $122 and reiterated a Buy rating.
Dobre said, “His initial take on the Middleby 4Q results is they were solid with a strong operating beat, strong free cash flow and Commercial Foodservice orders better than he expected.”
The analyst believes that, “the order momentum should be a boost in 2021.”
The stock scores a Moderate Buy consensus rating from the rest of the Street. That’s based on 2 Buys and 1 Hold. The average analyst price target of $155.33 implies that shares are almost fully priced at current levels. Shares have rallied 37% over the past year.
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