Why Traeger Stock Was on Fire Monday

Monday was a fine workday for a barbecue, at least for shareholders of pellet grill maker Traeger (NYSE:COOK). The company’s stock leaped more than 9% higher on the day, stoked by a clutch of bullish new analyst recommendations.

So what

Less than a month after its successful initial public offering (IPO), Traeger was blasted with several fresh coverage initiations on Monday.

People helping themselves to food at a barbecue party.g.foolcdn.com/image/?url=https%3A//g.foolcdn.com/editorial/images/640431/gettyimages-828224348.jpg&w=1000&op=resize 1000w, g.foolcdn.com/image/?url=https%3A//g.foolcdn.com/editorial/images/640431/gettyimages-828224348.jpg&w=2000&op=resize 2000w”/>

Image source: Getty Images.

These were overwhelmingly positive. Stifel, Piper Sandler, Royal Bank of Canada’s RBC Capital, Baird, Jefferies, Credit Suisse, and Telsey all recommended the stock as a buy (or the equivalent thereof). Their price targets ranged from $29 to $36 per share.

The various analysts entering the bullpen saw numerous pluses in Traeger’s business model.

For example, RBC Capital’s Nik Modi wrote that, “We estimate the company can compound its top-line at a 25% rate over the next five years driven by a combination of societal tailwinds (more cooking at home/growing share of wood pellet grills, food as an experience), strong social media presence (which serves as an effective brand awareness tool), and consumer preferred products.”

Now what

One slightly less sunny analysis came from Morgan Stanley prognosticator John Glass, who believes the stock is only worthy of an “equal weight” (i.e., neutral) recommendation at a price target of $28. At the current share price, Glass feels that while the current optimism swirling around Traeger is justified, it’s already priced into the stock.

This article represents the opinion of the writer, who may disagree with the official recommendation position of a Motley Fool premium advisory service. Were motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

Leave a Reply

Your email address will not be published. Required fields are marked *