Utz Brands Has The Potential To Transition From Regional Company To National Competitor, Says Analyst
Portfolio Pulse from Shivani Kumaresan
Needham analyst Matt McGinley initiated coverage on Utz Brands Inc (NYSE:UTZ) with a Buy rating and a $20 price target, adding it to the Needham Conviction List for 2024. McGinley expects Utz to increase its marketing spend by 3x, focusing on four power brands, and to grow sales by 4%-5% annually with a 3-point EBITDA rate improvement over three years. Utz aims for $135 million in cumulative supply chain savings, with internal cost-saving initiatives and supply chain restructuring expected to boost margins and cash flow. Utz trades at a 15x EV/EBITDA multiple, a 2.5 point premium to peers, but is expected to outpace their growth and achieve double the EBITDA growth of peers. The company is transitioning from a regional to a national competitor in the salty snack category, with shares trading higher by 6.11% at $17.37.
January 03, 2024 | 7:03 pm
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POSITIVE IMPACT
Needham analyst Matt McGinley initiated coverage on Utz Brands with a Buy rating and a $20 price target, expecting an increase in marketing spend and sales growth, with the company aiming for significant supply chain savings and transitioning to a national competitor.
The positive coverage by Needham with a Buy rating and addition to the Needham Conviction List for 2024 suggests strong confidence in Utz's growth strategy and potential to expand nationally. The specific mention of increased marketing spend, focus on power brands, and expected sales and EBITDA growth, along with the stock's positive price action, indicate a bullish outlook for the short term.
CONFIDENCE 85
IMPORTANCE 90
RELEVANCE 100