Bank of America Securities maintained its Buy rating on Utz Brands (NYSE:UTZ) on January 12, while reducing the target price from $15 to $14. The firm's estimates suggest nearly 41% upside potential for the stock.
The target price revision followed the company's preliminary fourth-quarter results, which indicated underperformance in sales. Organic sales growth was reported between 0.3% and 0.6%, falling short of analyst expectations of 2.7% and consensus forecasts of 2.9%. The firm attributed the modest growth to macroeconomic headwinds and resulting pressure on consumption.
An unexpected inventory reduction in the company's warehouse business was also noted. This reduction is not expected to persist beyond the fourth quarter as shipment normality is anticipated to resume by late 2025. Organic sales growth forecasts have been adjusted downward from 3% to approximately 2.5%, while the adjusted EBITDA estimate remains around $217 million.
On December 12, Mizuho Securities analyst John Baumgartner reaffirmed a Buy rating for Utz Brands, setting a target price of $16. This forecast implies an upside potential of about 61%. Baumgartner's optimistic outlook followed meetings with the company's management.
Baumgartner expressed confidence in the company's ability to achieve volumetric growth and margin expansion during 2026. He stated this would support increased free cash flows, alongside management's goals of financial deleveraging and achieving EBITDA margins in the mid-teens.
Utz Brands markets and distributes snack foods under brands including Utz, Golden Flake, Hawaiian, Bachman, and TGI Fridays. Its product offerings consist of pretzels, potato chips, tortillas, pub and party mixes, and ready-to-eat popcorn.