DA Davidson has upgraded Utz Brands (UTZ, Financial) from Neutral to Buy, maintaining a price target of $16. The upgrade reflects the company's strengthening position in the salty snacks sector, despite challenging market conditions. Utz is reportedly benefiting from reduced promotional activity within the category, enhancing its market share stability.
The company has exceeded expectations in its supply chain transformation efforts, a factor that could lead to positive earnings revisions if current sales momentum continues. Additionally, the analyst highlights a valuation gap when comparing Utz to its sector peers, suggesting potential for further growth.
Utz's performance in non-tracked channels has also been a focal point for DA Davidson, indicating robust demand outside traditional retail metrics. These strategic advantages contribute to the firm's positive outlook on the company's stock.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 11 analysts, the average target price for Utz Brands Inc (UTZ, Financial) is $17.55 with a high estimate of $20.00 and a low estimate of $15.00. The average target implies an upside of 31.03% from the current price of $13.39. More detailed estimate data can be found on the Utz Brands Inc (UTZ) Forecast page.
Based on the consensus recommendation from 12 brokerage firms, Utz Brands Inc's (UTZ, Financial) average brokerage recommendation is currently 2.2, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Utz Brands Inc (UTZ, Financial) in one year is $16.09, suggesting a upside of 20.16% from the current price of $13.39. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Utz Brands Inc (UTZ) Summary page.
UTZ Key Business Developments
Release Date: February 20, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Utz Brands Inc (UTZ, Financial) expects to maintain its core market share while expanding in new markets through increased distribution and marketing support.
- The company has a strong productivity program, delivering $60 million in 2024 and aiming for over $150 million from 2024 to 2026.
- Utz Brands Inc (UTZ) is making significant capital investments in automation and capacity expansion, which are expected to improve efficiency and reduce costs.
- The company is experiencing strong consumer reception for its Boulder Canyon brand, which is growing rapidly and has surpassed $100 million in sales.
- Utz Brands Inc (UTZ) is expanding its distribution network, particularly in western regions, and plans to increase advertising to boost consumer awareness.
Negative Points
- The category growth for fiscal 2025 is expected to be flat to slightly positive, indicating a sluggish market environment.
- Utz Brands Inc (UTZ) anticipates a modest headwind from pricing in fiscal 2025 due to increased competitiveness and a promotional market.
- The company is facing challenges in the C-store channel, which has been a persistent issue and is expected to improve only modestly over the year.
- Non-branded and dips and salsa segments have been underperforming, although the company expects these declines to stabilize.
- There is lumpiness in promotional spending and consumer purchasing behavior, which may impact sales and require adjustments in strategy.
