William Blair analyst Phillip Blee has maintained their bullish stance on HLLY stock, giving a Buy rating on August 12.
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Phillip Blee has given his Buy rating due to a combination of factors that highlight Holley’s strategic financial management and growth potential. The company’s recent early repayment of $15 million in debt, contributing to a total of $90 million in early repayments over two years, demonstrates a strong commitment to improving its balance sheet and reducing leverage. This action is expected to yield approximately $1 million in annual interest savings and positions the company to achieve a net leverage ratio of 3 times by the end of 2026, enhancing the attractiveness of its shares.
Furthermore, Phillip Blee notes that Holley’s management is effectively executing its turnaround strategy, which is evident in the company’s improved cash flow and balance sheet health. The company’s ability to maintain its sales momentum, with a 3.5% increase in comparable sales in the first half of the year, and navigate challenges such as tariffs while preserving margins, underscores its operational resilience. Despite the progress made, Blee believes that the market has not fully recognized Holley’s growth potential, and a strong performance in the third quarter could further solidify investor confidence and drive multiple expansion, with a target multiple of 10 times being more appropriate.
In another report released on August 12, Canaccord Genuity also maintained a Buy rating on the stock with a $6.00 price target.