Analyst Simeon Gutman from Morgan Stanley maintained a Hold rating on Topgolf Callaway Brands and keeping the price target at $9.50.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
Simeon Gutman has given his Hold rating due to a combination of factors affecting Topgolf Callaway Brands. The company’s core businesses, including Equipment and Active Lifestyle, present significant value opportunities. However, the resignation of TopGolf’s divisional CEO, Artie Starrs, may delay the anticipated spin-off of TopGolf, which was expected to act as a catalyst for value creation. This delay pushes the potential spin-off to 2026, extending the timeline for realizing this value.
Additionally, the valuation of Topgolf Callaway Brands is currently impacted by challenges within TopGolf and the company’s high leverage. There are two potential paths to unlocking value: improving TopGolf’s sales and earnings trends or successfully executing the spin-off. With the spin-off likely postponed, the focus shifts to enhancing TopGolf’s performance. Recent sales figures indicate a decline, but there is an expectation of improvement in the second quarter of 2025 as the company continues to implement its value strategy.
MODG’s price has also changed moderately for the past six months – from $7.860 to $9.250, which is a 17.68% increase.