Tigress Financial Partners analyst Ivan Feinseth views Topgolf Callaway Brands (NYSE:MODG) as “one of the best ways to play the resurgence and growing popularity in golf.” Feinseth has a Buy rating and a $38 price target on MODG, implying a massive 132.8% upside potential from current levels.
Topgolf Callaway manufactures and distributes golf equipment, accessories, shoes, and apparel. The company also operates a chain of golf-related amusement and events centers.
Ivan Feinseth is a five-star analyst on TipRanks. Feinseth, who ranks 243 out of more than 8,700 analysts, boasts a 12.4% average return per rating in the past year, with a 61% success rate.
Feinseth’s Rationale for Optimistic View on MODG
Feinseth’s optimism stems from multiple growth levers for MODG over the long run. The analyst believes that an increase in Topgolf Callaway’s venues, product innovation, and new product launches will continue to bolster the expansion of the company’s golf ecosystem. Moreover, Feinseth noted that MODG is well-positioned to benefit from a rise in player engagement and rounds of golf played.
The analyst backed his optimism with MODG’s financial performance for Fiscal 2023, which showed promising growth prospects in all aspects. Importantly, the company became free cash flow positive in FY23. Also, full-year net revenue rose 7.2% to $4.28 billion, while the adjusted EBITDA (earnings before interest, tax, deprecation, and amortization) improved by 6.9%.
For FY24, Topgolf Callaway expects net revenue to be between $4.515 and $4.555 billion and adjusted earnings per share in the range of $0.26 to $0.34.
Feinseth believes that his high price target is supported by MODG’s ongoing product innovations and launches, the addition of new Topgolf venues, and a rise in visitor play.
Is Topgolf Callaway a Good Stock to Buy?
On TipRanks, seven other analysts echo Feinseth’s enthusiasm for MODG. Overall, Topgolf Callaway has a Moderate Buy consensus rating based on eight Buys, three Holds, and one Sell rating.
The average Topgolf Callaway Brands price target of $19.11 implies 17.1% upside potential from current levels. In the past year, MODG stock has lost 26.9% of its value.
Key Takeaways
Topgolf Callaway operates in a niche market, having created a golf ecosystem. The company’s existence in each segment of the market gives it the opportunity to expand robustly and capitalize on the growth of the golf industry. Analyst Feinseth is highly optimistic about MODG’s long-term prospects based on the growth levers discussed above.
