Robert Dickerson, an analyst from Jefferies, reiterated the Buy rating on UTZ Brands (UTZ – Research Report). The associated price target is $22.00.
Robert Dickerson has assigned a Buy rating to UTZ Brands based on a combination of strategic financial maneuvers and an improved outlook for margin expansion. By divesting the Good Health and RW Garcia brands, along with three manufacturing facilities, UTZ Brands is set to utilize the $150 million in after-tax proceeds to substantially reduce its debt. This strategic move not only expedites the timeline for achieving network optimization cost savings but also enhances the company’s deleveraging trajectory. Dickerson’s analysis suggests that these actions could potentially be more than mid-single-digit accretive to UTZ’s adjusted earnings per share in fiscal year 2024.
Furthermore, the sale fortifies Dickerson’s confidence in UTZ Brands’ ability to attain an EBITDA margin greater than 16% by fiscal year 2026. This is a significant marker of the company’s potential for increased profitability. As a result of these positive developments, Dickerson has revised his price target for UTZ stock upwards to $22. The underlying rationale for the Buy rating is predicated on the accelerated margin expansion timeline, which is now more attainable due to the incremental benefits derived from the company’s network optimization efforts following the recent divestitures.
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Based on the recent corporate insider activity of 36 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of UTZ in relation to earlier this year.
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UTZ Brands (UTZ) Company Description:
Collier Creek Holdings is a blank check company, which engages in effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. The company was founded by Roger K. Deromedi, Jason K. Giordano, and Chinh E. Chu on April 30, 2018 and is headquartered in New York, NY.
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