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The Middleby Corp (MIDD)
NASDAQ:MIDD

The Middleby (MIDD) AI Stock Analysis

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The Middleby

(NASDAQ:MIDD)

Rating:71Outperform
Price Target:
$164.00
▲(10.19%Upside)
Middleby's overall stock score reflects a strong financial foundation and strategic initiatives aimed at enhancing shareholder value. While technical indicators and valuation are moderately positive, challenges such as stagnant revenue growth and potential tariff impacts are notable risks.
Positive Factors
Board Appointments
Ed Garden of Garden Investments and Julie Bowerman were appointed to Middleby’s Board of Directors, which are seen as steps to reinvigorate investor interest.
Product Strategy
The company's new product strategy is providing management with incremental confidence in the company's three-year midsingle-digit organic growth outlook.
Share Repurchase
Middleby Corporation will accelerate its share repurchase program, expecting to deploy most of its free cash flow to share buybacks.
Negative Factors
Food Processing Sales
Food Processing sales came in ~10% lower than consensus, driven by customer-driven delivery delays.
Macroeconomic Uncertainty
Heightened macroeconomic uncertainty has seemingly pushed out previous expectations for organic growth.
Tariffs Impact
Outdoor grills remain under pressure as tariffs continue to impact the segment.

The Middleby (MIDD) vs. SPDR S&P 500 ETF (SPY)

The Middleby Business Overview & Revenue Model

Company DescriptionThe Middleby Corporation designs, manufactures, markets, distributes, and services a range of foodservice, food processing, and residential kitchen equipment in the United States, Canada, Asia, Europe, the Middle East, and Latin America. Its Commercial Foodservice Equipment Group segment offers conveyor, combi, convection, baking, proofing, deck, speed cooking, and hydrovection ovens; ranges, fryers, rethermalizers; steam cooking, food warming, catering, induction cooking, and countertop cooking equipment; heated cabinets, charbroilers, ventless cooking systems, kitchen ventilation, toasters, griddles, charcoal grills, professional mixers, stainless steel fabrication, custom millwork, professional refrigerators, blast chillers, cold rooms, ice machines, and freezers; and soft serve ice cream, coffee and beverage dispensing, home and professional craft brewing equipment, fry dispensers, bottle filling and canning equipment, and IoT solutions. The company's Food Processing Equipment Group segment provides batch, baking, proofing, conveyor belt, and continuous processing ovens; frying and automated thermal processing systems; tumblers, massagers, grinders, slicers, reduction and emulsion systems, mixers, formers, and blenders; battering, breading, and seeding equipment; water cutting systems, food presses, food suspension equipment, filling and depositing solutions, and forming equipment; and food safety, food handling, freezing, and defrosting and packaging equipment for customers producing hot dog, dinner sausage, poultry, and lunchmeat, as well as muffin, cookie, and bread products. Its Residential Kitchen Equipment Group segment offers kitchen equipment comprising cookers, stoves, dishwashers, microwaves, cooktops, wine coolers, ice machines, and ventilation and outdoor equipment. The company was formerly known as Middleby Marshall Oven Company and changed its name to The Middleby Corporation in 1985. The company was founded in 1888 and is based in Elgin, Illinois.
How the Company Makes MoneyThe Middleby Corporation generates revenue primarily through the sale of its wide range of kitchen and food processing equipment. In the Commercial Foodservice segment, Middleby offers a variety of products such as ovens, fryers, grills, and beverage dispensers, catering to restaurants, fast-food chains, and other foodservice providers. This segment is a significant revenue driver, supported by the company's focus on innovation and energy efficiency, which attracts businesses looking to improve operational efficiency and sustainability. In the Food Processing segment, Middleby provides equipment and systems for food production, including cooking, chilling, and packaging solutions, serving large food processors and manufacturers. The Residential Kitchen Equipment segment targets the high-end market with premium appliances like ranges, refrigerators, and dishwashers under brands such as Viking Range and AGA. The company's revenue is further bolstered by strategic acquisitions that expand its product portfolio and market reach, as well as by its extensive distribution network and strong industry relationships that enhance its market presence.

The Middleby Earnings Call Summary

Earnings Call Date:May 07, 2025
(Q1-2025)
|
% Change Since: 9.93%|
Next Earnings Date:Jul 31, 2025
Earnings Call Sentiment Neutral
The call highlighted strategic initiatives such as share buybacks and the separation of the food processing business, alongside strong cash flow generation and innovation recognition. However, challenges such as significant tariff impacts and muted customer buying levels create a balanced outlook.
Q1-2025 Updates
Positive Updates
Accelerated Share Buyback Program
Middleby authorized an additional 7.5 million shares under its accelerated buyback program, reflecting confidence in the business and aiming to bridge the perceived valuation gap.
Separation of Food Processing Business
The strategic move to separate the food processing business into a stand-alone public company is on track for early 2026, expected to unlock significant shareholder value.
Record Operating Cash Flows
Operating cash flows of just over $141 million are the highest for a first quarter, with free cash flows at $107 million for the quarter.
Strong Residential Segment Growth
The Residential segment saw growth primarily attributable to outdoor products, with margins holding well despite product mix and production levels.
Innovations and Industry Recognition
Middleby continues to invest in innovations such as automation, digital technologies, and IoT connectivity, with several products recognized with recent industry awards.
Negative Updates
Impact of Tariffs
Tariff-related costs are expected to increase annual expenses by approximately $150 million to $200 million, impacting margins in the short term despite mitigation efforts.
Muted Buying Levels
Muted buying levels by large chain customers in the commercial foodservice business are offsetting wins and impacting revenue growth.
Drop in Food Processing Revenues
The Food Processing segment experienced a drop in revenues due to customer-driven delivery delays, impacting margins due to lower volumes and unfavorable mix.
Company Guidance
During The Middleby Corporation's First Quarter 2025 Earnings Conference Call, CEO Timothy FitzGerald outlined several key metrics and strategic initiatives for shareholder value enhancement. The company announced an authorization to repurchase an additional 7.5 million shares, representing 21% of its outstanding equity, leveraging its strong operational excellence and cash flow. Middleby aims to deploy most of its free cash flow towards share repurchases, confident in its business's intrinsic value. The upcoming separation of the Food Processing Group in early 2026 is expected to unlock significant shareholder value by allowing for focused growth strategies. Preliminary tariff-related costs could increase annual expenses by $150 million to $200 million, but Middleby plans to offset these by year-end through operational and pricing strategies. The company reported a record first-quarter operating cash flow of over $141 million and a free cash flow of $107 million, demonstrating strong financial resilience.

The Middleby Financial Statement Overview

Summary
The Middleby has demonstrated consistent profitability with strong gross profit margins and stable net profit margins. Operational efficiency is indicated by robust EBIT and EBITDA margins, although stagnant revenue growth is a concern. The company's cash flow management is strong, yet leverage needs careful management.
Income Statement
75
Positive
The Middleby has shown consistent profitability with strong gross profit margins and stable net profit margins in recent years. Despite a slight decrease in revenue, the EBIT and EBITDA margins remain robust, indicating operational efficiency. However, the revenue growth rate has been stagnant, which could be a concern for future expansion.
Balance Sheet
70
Positive
The company maintains a reasonable debt-to-equity ratio, reflecting balanced leverage. A stable return on equity demonstrates effective use of shareholders’ funds. However, the equity ratio indicates that liabilities still form a significant portion of the company’s financing, which could be risky during economic downturns.
Cash Flow
80
Positive
The Middleby exhibits strong cash flow management with a healthy operating cash flow to net income ratio and consistent free cash flow generation. The free cash flow growth rate shows positive trends, which supports future investment and debt repayment. Nevertheless, the slight fluctuation in free cash flow growth indicates potential volatility.
Breakdown
TTMDec 2024Dec 2023Dec 2022Mar 2022Mar 2021
Income StatementTotal Revenue
3.85B3.88B4.04B4.03B3.25B2.51B
Gross Profit
1.45B1.47B1.53B1.45B1.19B882.05M
EBIT
664.79M656.19M634.87M639.60M448.31M324.43M
EBITDA
802.49M796.72M797.35M780.39M776.67M457.21M
Net Income Common Stockholders
434.22M428.43M400.88M436.57M488.49M207.29M
Balance SheetCash, Cash Equivalents and Short-Term Investments
144.92M689.53M247.50M162.00M180.36M268.10M
Total Assets
6.67B7.28B6.91B6.87B6.38B5.20B
Total Debt
2.74B2.42B2.54B2.72B2.41B1.73B
Net Debt
2.59B1.73B2.29B2.56B2.23B1.46B
Total Liabilities
4.17B3.64B3.66B4.08B3.89B3.23B
Stockholders Equity
2.50B3.64B3.25B2.80B2.49B1.98B
Cash FlowFree Cash Flow
617.83M637.51M541.81M263.03M371.85M482.88M
Operating Cash Flow
687.05M686.82M628.79M332.55M423.40M524.78M
Investing Cash Flow
-177.28M-158.53M-155.74M-348.32M-1.01B-106.76M
Financing Cash Flow
-102.30M-73.77M-390.94M7.63M502.79M-252.47M

The Middleby Technical Analysis

Technical Analysis Sentiment
Positive
Last Price148.83
Price Trends
50DMA
140.45
Positive
100DMA
150.60
Negative
200DMA
144.17
Positive
Market Momentum
MACD
1.82
Positive
RSI
55.76
Neutral
STOCH
68.03
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MIDD, the sentiment is Positive. The current price of 148.83 is above the 20-day moving average (MA) of 148.32, above the 50-day MA of 140.45, and above the 200-day MA of 144.17, indicating a bullish trend. The MACD of 1.82 indicates Positive momentum. The RSI at 55.76 is Neutral, neither overbought nor oversold. The STOCH value of 68.03 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MIDD.

The Middleby Risk Analysis

The Middleby disclosed 34 risk factors in its most recent earnings report. The Middleby reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 1 New Risks
1.
We are pursuing a plan separate our Food Processing business through a spin-off into an independent publicly traded company. The proposed spin-off may not be completed on the timeline currently contemplated or at all and may not achieve the intended benefits. Q4, 2024

The Middleby Peers Comparison

Overall Rating
UnderperformOutperform
Sector (66)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
WTWTS
79
Outperform
$8.17B28.0117.61%0.74%3.89%8.17%
78
Outperform
$7.37B36.9915.24%10.78%30.05%
RRRRX
72
Outperform
$9.28B39.843.69%0.98%-10.19%
CRCR
72
Outperform
$10.73B36.1718.82%0.47%6.65%39.13%
71
Outperform
$7.87B18.7412.33%-2.56%11.51%
67
Neutral
$7.56B22.3714.29%8.07%58.67%
66
Neutral
$4.49B12.345.40%248.65%4.13%-12.33%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
MIDD
The Middleby
148.83
20.42
15.90%
GNRC
Generac Holdings
130.82
-11.88
-8.33%
RRX
Regal Rexnord
143.95
-0.13
-0.09%
SPXC
SPX
163.22
23.69
16.98%
WTS
Watts Water Technologies
245.28
55.04
28.93%
CR
Crane Company
186.67
41.53
28.61%

The Middleby Corporate Events

Shareholder MeetingsBusiness Operations and Strategy
The Middleby Holds Annual Stockholders Meeting
Neutral
May 16, 2025

On May 14, 2025, The Middleby Corporation held its Annual Meeting of Stockholders where several key proposals were voted on. All ten nominees for the Board of Directors were elected to serve until the 2026 meeting. Additionally, the advisory vote on executive compensation was approved, and Ernst & Young LLP was ratified as the independent public accountants for the fiscal year ending January 3, 2026. These decisions reflect the company’s ongoing governance and operational strategies, potentially impacting its market positioning and stakeholder confidence.

The most recent analyst rating on (MIDD) stock is a Buy with a $160.00 price target. To see the full list of analyst forecasts on The Middleby stock, see the MIDD Stock Forecast page.

Stock BuybackBusiness Operations and StrategyFinancial Disclosures
Middleby Expands Share Buyback Program by 7.5 Million
Positive
May 7, 2025

On May 5, 2025, The Middleby Corporation’s Board of Directors authorized an increase in its share repurchase program by 7.5 million shares, bringing the total available for buyback to 11.4 million shares, or 21% of the company’s equity. This strategic move aims to return the majority of the company’s free cash flow to shareholders, following a February 2025 announcement to separate its Food Processing business. Despite a slight decrease in net sales and adjusted EBITDA in the first quarter of 2025, Middleby remains confident in its long-term outlook, planning to offset potential tariff-related cost increases through operational initiatives and pricing actions.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.