UPDATE: Callaway Golf (ELY) Gets a Bye, PT Raised to $34 as KeyBanc Looks Through the Core Golf Miss to the Bigger Picture
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KeyBanc analyst Brett Andress raised the price target on Callaway Golf (NYSE: ELY) to $34.00 (from $28.00) while maintaining a Overweight rating after the company guided below consensus despite topping revenue.
The analyst stated "The key component of delta came via new cost pressures (i.e., Europe lockdowns and ~$13M freight impact), along with unforeseen apparel investments ($25M for Korea buyout, JW, TM, etc.). While we view these costs to be transitory, it should not take away from strong underlying momentum in golf equipment". He went on to state" we are now coming to terms with ELY's pronounced momentum factor, under the recognition that the TG story (and its accompanying recovery play) supersede core golf hiccups. We take our PT to $34 (from $28) to reflect this dynamic. NT valuation indigestion aside, the ELY bull case remains TG/reopening upside with a golf renaissance kicker and, for the most part, that thesis is well intact."
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