Middleby stock falls after J.P. Morgan downgrades company to Underweight (NASDAQ:MIDD)
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Middleby (NASDAQ:MIDD) shares fell 2.2% in premarket trade after J.P. Morgan downgraded the company to Underweight from Neutral and slashed its target price to $118 from $145.
The analysts cited reasons such as, the backlog tailwind being behind, and the rise in price-cost pressure, for the downgrade.
“We believe the new pricing will be hard to land in a weak demand environment, which suggests margin deleverage ahead,” J.P. Morgan said in a note.
The analysts, led by Tami Zakaria, also believe that the backlog burn was higher in 2H23 than 1H23 as the supply chain began to normalize.
“To achieve management’s current guidance, orders need to accelerate throughout the year, which we believe will be tough based on laterals from peers around pricing and promotional pressures facing the food equipment industry amid moderating demand,” Zakaria added.
SA quant rates the company at Hold, while SA analysts rate it at Buy.
Shares in the company were down 9.7% since the start of the year.
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