Analyst Robert Dickerson of Jefferies reiterated a Buy rating on UTZ Brands (UTZ – Research Report), reducing the price target to $18.00.
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Robert Dickerson has given his Buy rating due to a combination of factors influencing UTZ Brands. Despite challenges in the salty snack category, UTZ has managed to outperform its competitors, such as Frito-Lay, by maintaining relatively stable retail volumes. This achievement is attributed to strategic price investments and enhanced distribution of Power Brands. Although the company’s ambitious organic growth targets for 2023-2026 appear optimistic, the potential for 2-3% growth remains feasible through under-penetrated distribution channels and network optimization efforts.
Furthermore, UTZ’s management is actively working on improving profitability by optimizing their network and reducing debt, which could lead to better capital allocation and business flexibility. The company’s transition towards a more efficient operation suggests promising outcomes, potentially making UTZ an attractive target for large food manufacturers. Given the potential for above-average growth compared to peers and improving margins, the current valuation seems undervalued, hence justifying the Buy rating with a price target of $18.
UTZ’s price has also changed moderately for the past six months – from $16.210 to $13.350, which is a -17.64% drop .