Zacks Research Downgrades Traeger to Strong Sell Amid Poor Earnings

Traeger (NYSE:COOK) has received a negative assessment from Zacks Research, which downgraded the company’s stock rating from “hold” to “strong sell.” This decision came in a report released on November 6, 2023. The downgrade reflects ongoing concerns about the company’s financial performance and future outlook.

Recent Analyst Ratings and Stock Performance

In the wake of Zacks Research’s downgrade, other analysts have also revised their ratings for Traeger. Wall Street Zen upgraded the stock from “sell” to “hold” just days prior, on November 8. Conversely, Weiss Ratings reaffirmed a “sell (d-)” rating on December 29, indicating persistent skepticism about Traeger’s viability.

Additionally, Telsey Advisory Group adjusted their price target for Traeger, reducing it from $1.75 to $1.50 while maintaining a “market perform” rating. In a broader analysis, one analyst has rated the stock as a Buy, five have issued Hold ratings, and three have classified it as a Sell. According to MarketBeat, Traeger currently holds an average rating of “Reduce” with a consensus price target of $2.09.

Quarterly Earnings Report Highlights

Traeger’s recent financial results have further fueled these downgrades. The company reported its quarterly earnings on November 6, revealing a loss of $0.17 per share, which was significantly below the consensus estimate of ($0.03). The firm also reported a negative return on equity of 11.31% and a net margin of 18.01%. Despite these challenges, Traeger generated revenue of $125.4 million, surpassing the expected $111.04 million.

Looking ahead, analysts predict that Traeger will post an earnings per share of ($0.12) for the current fiscal year, suggesting that significant hurdles remain for the company.

Institutional Investment Trends

Recent trends among institutional investors reveal a mix of strategies regarding Traeger’s stock. Norden Group LLC increased its holdings by 27.2% in the second quarter, now owning 23,350 shares valued at approximately $40,000. Similarly, Bank of America Corp DE bolstered its position by 36.6% in the fourth quarter, now holding 33,314 shares worth around $80,000.

Other notable investments include Diversify Wealth Management LLC, which raised its stake by 9.8% to 125,755 shares valued at $153,000, and Empowered Funds LLC, increasing its holdings by 9.3% to 167,696 shares worth $282,000. Currently, institutional investors own approximately 46.84% of Traeger’s stock.

About Traeger

Founded in 1985 by Joe Traeger, the company is renowned for its innovative wood pellet grills and outdoor cooking appliances. Traeger’s product line includes a variety of hardwood-pellet grills equipped with digital temperature control, catering to both consumer and light-commercial markets. In addition to grills, the brand offers a range of accessories such as grill covers, smoking woods, meat probes, and recipe rubs, enhancing the outdoor cooking experience.

As Traeger navigates a challenging market environment, the recent ratings and financial results underscore the need for strategic adjustments to regain investor confidence and improve overall performance.