Traeger Inc (COOK)

[36Knuckle]

12:57 PM EDT, 03/22/2022 (MT Newswires) -- Traeger's(COOK) brand continues to drive momentum but margins remain under pressure due to cost challenges, said RBC Capital Markets, which rates the company at outperform with a $27 price target.

RBC analyst Nik Modi expects the company to report fourth-quarter net sales of $160.3 million, higher than the consensus of $157 million, and EBITDA of $8.2 million, compared with a $9.4 million consensus.

The maker of pellet grills should report a compound annual revenue growth rate of 24% over the next five years driven by more cooking at home and strong social media presence, the firm said in a note.

Traeger (COOK) plans to introduce a new line of grills in 2022 at a premium, likely benefiting revenue and margins, RBC said. In addition, the opening of a Mexico manufacturing facility is expected to reduce reliance on Asian manufacturing and help ease some of the freight cost pressure.

"We like the stock's long-term opportunity, but acknowledge the possibility of volatility in the near term given macro supply chain environment and would be buyers of COOK shares on any near-term dips," RBC said.

Price: 9.35, Change: +0.34, Percent Change: +3.77