William Blair analyst Phillip Blee has maintained their neutral stance on COOK stock, giving a Hold rating on October 31.
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Phillip Blee has given his Hold rating due to a combination of factors influencing Traeger’s current market position. The company’s management is focused on preserving margins and generating cash flow amidst a challenging grill industry environment. They have initiated cost-saving measures expected to save $50 million by 2027, including shutting down their direct channel and transitioning to a distributor model internationally. These efforts are anticipated to impact sales negatively by $60 million, although a recapture rate at retailers is expected to offset this over time, despite some short-term volatility.
While management’s strategies to improve margins and free cash flow are commendable, and Traeger is seen as a strong brand capable of gaining market share, Blee believes the current valuation is appropriate. This is due to the need for more clarity on a stable recovery in sales and debt reduction. Additionally, there are risks such as prolonged weakness in the market post-pandemic, pressure from housing turnover, and reliance on key retailers, which contribute to the Hold rating.
In another report released on October 31, Telsey Advisory also maintained a Hold rating on the stock with a $1.75 price target.