RBC Capital analysts downgraded Traeger, Inc. (NYSE:COOK) to Sector Perform from Outperform and lowered its price target to $3 from $4. As a result, shares closed more than 7% lower on Tuesday.
Although the analysts are still optimistic about Traeger's potential in the outdoor cooking industry due to its technology, innovation, and customer loyalty, they believe that in the short-term, macroeconomic factors will likely decrease the brand's household penetration and cause problems with inventory management, which may affect its revenue and delay the margin recovery.
The analysts lowered their fiscal 2023 net sales outlook to $661 million from $667 million and adjusted EBITDA to $45 million. The analysts are now modeling greater topline pressure in the first half of the year and lower margins as it will take time to work through higher-cost inventory.