Analysts Issue Mixed Ratings in Acushnet Holdings, But All Predict Upside

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Acushnet Holdings Corp. (NYSE: GOLF) may not be a household name, but golfers will be familiar with the products, even if they did not know the holding company’s name. Acushnet designs and sells golf products worldwide via four segments: Titleist Golf Balls, Titleist Golf Clubs, Titleist Golf Gear, and FootJoy Golf Wear. Now its post-IPO quiet period has ended and the underwriting syndicate analysts can issue coverage.

Acushnet sold 19,333,333 shares in an October 28 IPO, but all of the shares were sold by existing stockholders of Acushnet. The underwriters in the offering have a 30-day over-allotment option to purchase up to an additional 2,899,999 shares of common stock from the selling stockholders. The initial public offering price is $17.00 per share.

This stock has now had a trading range of $16.90 to $19.18 since the IPO. That high was hit on Tuesday, November 21 and shares were last seen trading up 0.2% at $19.06.

 

Before the underwriting syndicate was able to cover Acushnet, Compass Point issued a new Buy rating on October 31 with a $23.50 price target, versus a prior close of $17.95 at that time. Roth Capital started coverage on November 1 with a Buy rating and assigned a $23 price target. The stock was at $17.41 prior to the Roth analyst call date.

Acushnet Holdings was started as Buy with a $25 price target (versus $19.02 close) at Jefferies. This was actually the highest of the targets and they even made room for further upside ahead. The firm said:

We believe Acushnet Holdings  should see steady growth as it drives further market share gains, and benefits from an improving industry backdrop. A loyal customer base and high consumables penetration add a key aspect of predictability. We initiate coverage of Acushnet Holdings  with a Buy rating and $25 price target and see the risk/reward skewed to the upside. We expect the stock to be driven by multiple expansion, as it trades below its peer set.

Other positive analyst ratings were seen as follows:

  • D.A. Davidson started Acushnet as Buy with a $23 price target.
  • KeyBanc Capital Markets started it as Overweight with a $24 price target.
  • Morgan Stanley started Acushnet as Overweight with a $24 price target.
  • Noble Financial started coverage as Buy with a $22 price target.
  • Raymond James started coverage as Outperform with a $22 price target.
  • SunTrust Robinson Humphrey started Acushnet as Buy with a $24 price target.

Credit Suisse was far more cautious on Acushnet with a Neutral rating and $20 price target. The firm said in its quick view:

We view Acushnet as well positioned in the golf equipment market but we have concerns about a deteriorating golf market with retailers pressured and golf courses closing.

There were also some other Hold and Neutral ratings and their equivalent. These less aggressive calls still came with at least some upside in general. They were as follows:

  • Deutsche Bank started Acushnet as Hold with a $20 price target.
  • J.P. Morgan started it as Neutral with a $21 price target.
  • Wells Fargo started Acushnet as Market Perform.