Acushnet Holdings Corp. jumped the most since early March after Jefferies upgraded the golf-equipment company to buy, seeing more than 50% return potential as its clubs business grows.
Shares in the Titleist owner advanced as much as 6.5% to $58.24 on Monday, and are up 34% year to date. Analyst Randal Konik expects Acushnet to defend its top market-share position in golf balls and shoes, and sees potential for greater penetration in clubs.
“As GOLF continues to innovate and elevate its club offerings, it is likely to attract a broader customer base and gain market share,” he wrote in a note to clients, referring to the company by its ticker symbol.
Konik boosted his 12-month price target to a Street-high $84, from $61, and compared to the average of $62 for analysts tracked by Bloomberg. That target implies a 54% jump from Friday’s closing price. The upgrade makes Konik one of only three analysts that recommend buying the shares, while seven have hold ratings on the stock, data compiled by Bloomberg show.
Konik notes that Acushnet has already shown impressive growth in its golf-clubs business, which accounted for about $610 million in sales in 2022, up from approximately $418 million in 2020.
He expects increased participation in the sport as the US population ages, ensuring steady demand for golf equipment manufacturers longer term. Acushnet has outperformed peer Topgolf Callaway Brands Corp. this year, as analysts have questioned the achievability of Topgolf’s year-end targets.
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“As investable options become limited in an industry that has undergone significant consolidation, GOLF’s reputation as a prudent operator with a history of positive earnings surprises and steady growth could attract greater investor interest,” Konik wrote.
