Holley (HLLY) PT Lowered to $4.50 at Telsey

Telsey analyst Joseph Feldman lowered the price target on Holley (NYSE: HLLY) to $4.50 (from $5.50) while maintaining a Outperform rating.

The analyst commented: "Holley saw 3Q24 adjusted EBITDA drop ~26% YoY to $22.1MM vs. our forecast of $26.3MM and the FactSet consensus (FS) of $26.1MM, as sales disappointed, decreasing 14.4% to $134.0MM vs. our projection of $145.6MM and FS at $142.5MM. Demand remained soft due to challenging macroeconomic trends, such as inflation, higher interest rates, the shift in spending toward services from goods, and uncertainty related to the election, which has contributed significantly to resellers rightsizing inventory levels. However, resellers are also destocking in part due to Holley's improved product fulfillment speed (lessening the need for high safety stock), with lead times down three weeks YoY. Demand headwinds are expected to continue, though, leading the company to lower its 2024 guidance for sales to $595MM-$605MM from $605MM-$645MM vs. FS at $627MM and adjusted EBITDA to $115MM-$120MM from $117MM-$132MM vs. FS at $124MM. That said, the company believes reseller inventories are now fully normalized and sales comparisons are easier going forward, supporting an expected return to topline growth for Holley in 1Q25."

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