Megan Alexander, an analyst from Morgan Stanley, maintained the Sell rating on Topgolf Callaway Brands (MODG – Research Report). The associated price target is $6.00.
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Megan Alexander has given her Sell rating due to a combination of factors impacting Topgolf Callaway Brands. Despite the company delivering a strong fourth-quarter performance with EBITDA significantly surpassing expectations, the guidance for 2025 fell short of consensus estimates. Management’s forecasted consolidated EBITDA of $415-505 million was notably lower than the market’s expectation of approximately $600 million.
Alexander noted that several headwinds, including foreign exchange impacts, resetting incentive compensation, tariffs, and standalone costs, were expected to contribute to a substantial year-over-year profit decline. Although there are signs of improvement in TopGolf’s sales per venue, the overall sales remain weak, and macroeconomic factors, such as lower alcohol sales, pose additional challenges. The cautious outlook and the need for further evidence of sustained improvement led to the Sell recommendation.