Goldman Sachs Upgrades Utz Brands on Strong Positioning
2022.06.17 17:21
Goldman Sachs Upgrades Utz Brands (UTZ) On Strong Positioning
By Sam Boughedda
Goldman Sachs analyst Jason English upgraded Utz Brands Inc (NYSE:UTZ) to Buy from Neutral, with a $16 per share price target on Friday.
English said the firm sees an above-average top and bottom-line growth outlook due to the company’s strong position in the attractive salty snack category, which benefits from faster growth, lower private label exposure, and better pricing power.
The analyst added that “strong in-market execution that, with the benefit of acquired brands and organic initiatives, is driving distribution and market share gains that we believe can continue (i.e., we expect gains to fuel more gains as momentum drives higher retailer and DSD driver support).”
Furthermore, English pointed to Utz’s recent CapEx-fueled productivity ramp and ongoing acquisition optionality, only enhancing its investment thesis.
“As for why upgrade now, we see a compelling entry point with the stock now trading at a ~36% discount to its peak NTM EV/EBITDA valuation levels from early-2021 and at a more attractive level relative to other growth advantage snack/meal-replacement peers (i.e., it is currently 15.7X GS CY23 EBITDA vs. HSY 17.0X, MDLZ 16.3X, SMPL 15.5X, and BRBR 13.1X.”
Utz Brands shares are up more than 5% following the upgrade.
