Analyst Gregory Miller from Truist Financial maintained a Buy rating on Topgolf Callaway Brands and keeping the price target at $12.00.
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Gregory Miller has given his Buy rating due to a combination of factors surrounding Topgolf Callaway Brands. The potential acquisition of the Topgolf division by Leonard Green for approximately $1 billion, as reported by the Wall Street Journal, suggests a valuation that could be favorable for MODG, especially considering the previous valuation figures from the 2020 ELY-Topgolf combination. This news has positively influenced MODG’s stock performance, despite recent challenges and uncertainties regarding the division’s strategic direction following the CEO’s departure.
Moreover, the strategic initiatives underway at Topgolf, such as pricing strategies, loyalty programs, and technological advancements, indicate a proactive approach to improving business operations. Although there are execution risks due to macroeconomic uncertainties and a price-sensitive consumer base, the recent positive shift in same venue sales and the potential for operational improvements provide a basis for optimism. Miller’s rating reflects confidence in the company’s ability to navigate these challenges and capitalize on growth opportunities.
In another report released yesterday, Compass Point also reiterated a Buy rating on the stock with a $13.00 price target.