Cowen expects Callaway Golf to land on the green, raises PT

Acushnet Holdings

10/06/2020 12:22

** Cowen & Co raises PT on Callaway Golf Co's shares  ELY.N 
 by $4 to a Street high of $22; Says the golf club maker's brand
and growth potential are undervalued
    ** Brokerage says ELY's pipeline of new woods and irons with
more customization options will drive up average selling prices
and profit margins; Estimates FY21 EPS of $0.92 vs consensus
expectations of $0.77
    ** Callaway reported an over 14% fall in quarterly sales in
May due to the COVID-19 pandemic, but Cowen expects co to bounce
back quickly as golf faces less social distancing headwinds than
other sports, with play currently rising
    ** ELY trades at 33.36x 12-month forward earnings, while
major rival Acushnet Holdings  GOLF.N , which owns Titleist,
trades at 37.59x
    ** ELY has a median PT of $17, 32% lower than three months
ago; It has an average "buy" rating according to Refinitiv data 
  
    ** A potential 2021 IPO of U.S. golfing centre operator
Topgolf International Inc, in which Callaway has minority stake,
could also be a boost for ELY's stock, Cowen says     
    ** Callaway shares down 21.2% this vs. a 9.4% gain for
Acushnet

 (Reporting by Uday Sampath in Bengaluru)
 ((UdaySampath.Kumar@thomsonreuters.com; within U.S.+1 646 223
8780; Twitter: @sampath_uday; Reuters Messaging:
UdaySampath.Kumar.thomsonreuters.com@reuters.net))