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Shares of Traeger Inc (NYSE:COOK) are down 1.5% in premarket Thursday after a Telsey Advisory Group analyst downgraded to Market Perform from Outperform.
The analyst slashed the price target to $5 per share from $9 to reflect lower 2023 EBITDA estimates and contracting multiple.
The analyst listed 4 key reasons behind the downgrade call on COOK:
Despite the downgrade to Market Perform, the analyst remains positive on COOK stock in the long run.
“While Traeger is navigating near-term headwinds, the company should continue to benefit from solid customer demand for its products over the next few years, boosted by the consumer appetite for higher quality, innovative grills and ongoing strength in the outdoor cooking market—supported by the suburbanization, backyard recreation, and at-home experiential eating trends,” he explained in a client note.
Net-net, the analyst sees a challenging 2022 followed by a likely slow start to 2023 “as Traeger laps pulled forward demand and embarks on a difficult path to normalization, compounded further by an inflationary macro environment and ongoing cost pressures.”
