Join +750K new investors every month who copy stock picks from billionaire's portfoliosSign Up Free

Middleby stock downgraded, JPMorgan cuts price target

EditorAhmed Abdulazez Abdulkadir
Published 23/05/2024, 02:18 am
MIDD
-

On Wednesday, JPMorgan (NYSE:JPM) adjusted its stance on Middleby Corp (NASDAQ:MIDD), downgrading the stock from Neutral to Underweight. Accompanying this change, the firm also lowered its price target to $118 from the previous $145. The revision reflects concerns over the company's future earnings and the anticipation of negative revisions ahead.

The downgrade was based on projections that Middleby's consensus earnings before interest, taxes, depreciation, and amortization (EBITDA) for fiscal years 2024 and 2025 could fall short of market expectations by 5% and 12%, respectively. JPMorgan's analysis suggests that the company's financial performance may not meet the consensus numbers currently predicted by the market.

JPMorgan pointed to the fact that Middleby's fiscal year 2023 sales were likely inflated due to the company working through a backlog of orders, a situation that is largely resolved. With the backlog diminishing, future sales growth could be less robust.

Another factor contributing to the downgrade is the expectation of margin deleverage due to increasing price and cost pressures. As costs rise, Middleby could face challenges in maintaining its profit margins, which in turn could impact its overall financial health.

InvestingPro Insights

In light of JPMorgan's downgrade of Middleby Corp, current metrics from InvestingPro provide additional context for investors. The company has a market capitalization of $7.15 billion and a P/E ratio of 18.3, which adjusts to a slightly lower 15.65 when considering the last twelve months as of Q1 2024. This could indicate that the stock is moderately valued in comparison to its earnings.

InvestingPro Tips suggest that while analysts have revised their earnings expectations downwards for the upcoming period, the company is predicted to remain profitable this year and has been profitable over the last twelve months. Moreover, Middleby's liquid assets surpass its short-term obligations, providing a degree of financial stability.

Despite JPMorgan's concerns, it's worth noting that Middleby's stock price has been relatively resilient with a 6-month total return of 7.38%. However, the stock's performance has been negative in the short term, with a 1-month total return of -6.32% and a year-to-date return of -9.66%. The current price is at 82.58% of its 52-week high, and the stock generally trades with low price volatility, though recent movements have been more volatile.

For those looking to delve deeper into Middleby's financial health and future prospects, InvestingPro offers further insights. With the coupon code PRONEWS24, investors can access these detailed analyses at a discounted rate, including additional InvestingPro Tips that could inform investment decisions.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.