In a report released today, Peter Grom from UBS maintained a Hold rating on UTZ Brands, with a price target of $13.50.
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Peter Grom has given his Hold rating due to a combination of factors influencing UTZ Brands’ current market position. Despite the company’s favorable performance trends, which outpace the broader salty snacks category, there are persistent concerns about the sustainability of its top-line growth amidst ongoing category and macroeconomic pressures. These concerns have contributed to a decline in UTZ’s stock performance, which has underperformed relative to its peers and the broader market since early August.
Moreover, while the company’s guidance for FY25 remains unchanged, with expectations for modest organic sales growth and EBITDA margin expansion, the overall sentiment around the salty snacks category remains cautious. The valuation, based on a balanced P/E and EV/EBITDA methodology, supports a neutral stance, as the potential for significant positive change in the factors affecting sentiment appears limited in the near term. Therefore, Peter Grom suggests maintaining a Hold position until there is greater clarity on the category’s growth and competitive dynamics.
Based on the recent corporate insider activity of 69 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of UTZ in relation to earlier this year.