Topgolf Callaway rallies after Jefferies turns bullish

Acushnet Holdings

02/01/2025 14:14

** Topgolf Callaway Brands'  MODG.N  shares up 10.7% premarket
to $8.70, highest since Nov 26, after Jefferies upgrades to
'buy' from 'hold'
    ** Jefferies boosts PT by $2 to $13, implying 65% upside to
stock's last close
    ** Sum of the parts analysis shows MODG shares trading at
discount to rival golf equipment maker Acushnet Holding
 GOLF.N , despite faster 3-yr growth, and ascribing no value to
Topgolf, Jefferies writes in note
    ** While Topgolf fundamentals are "weak, and MODG has
suffered misexecution, shares appear oversold," Jefferies says,
adding that tailwinds in golf industry are "robust"
** In Sept, MODG said it would separate into two independent
firms - Callaway and Topgolf - via a tax-free spin-off
    ** Now, of 14 analysts covering MODG, recommendation
breakdown is 7 "strong buy" or "buy", 5 "hold" and 2 "sell" with
$13 median PT, according to LSEG data
    ** In 2024, stock shed 45% for third straight year of
losses. It fell 27% and 28% in 2023 and 2022, respectively

(Lance Tupper is a Reuters market analyst. The views expressed
are his own)
((lance.tupper@tr.com 1-646-279-6380))