Telsey cuts Traeger stock price target to $58 on grill cycle woes

Investing.com reports that Telsey Advisory Group has lowered its price target on Traeger Inc. to $58 from $65, while keeping a Market Perform rating. Traeger's stock is currently trading at $49.75, below the new target. The firm is facing challenges due to a prolonged grills replacement cycle, cautious consumer spending, and price increases from last year's tariffs.

These issues have contributed to a 16.3% revenue decline in the past year, though the company still maintains $56 million in EBITDA, showing some operational resilience. Traeger has implemented measures like reducing price points and launching new products to make its offerings more accessible. The company is also expanding through Lowe's stores and aims to achieve a cumulative value of $64 million to $70 million through its Project Gravity initiative, with $50 million targeted for 2026.

Telsey's new target is based on an EV/EBITDA multiple of 8.0x applied to a 2027 EBITDA estimate of $63 million. Traeger recently reported a disappointing third quarter, with an adjusted loss per share of $6.77, significantly wider than the anticipated $4.54 per share, and revenue falling short of expectations at $74.7 million compared to the projected $79.36 million.

Despite these challenges, the company sees positive aspects in its expansion with Lowe's, Project Gravity savings, and stronger cash generation for 2027, describing the third quarter as part of a broader transition year.