- Telsey Advisory Group Analyst Sarang Vora reiterated an Outperform rating on shares of BRC Inc BRCC (Black Rifle Coffee Company) with a Price target of $12.
- The analyst expects a solid Q4 ’22 earnings report and 2023 outlook, generally in line with the business update provided at the ICR 2023 conference on January 9th.
- The analyst believes Black Rifle should continue to benefit from new distribution of bagged and K-cup coffee to food, drug and bulk retailers (FDM), continued strength of its ready-to-drink (RTD) products, new store openings, higher product prices and a tailwind from lower coffee prices and supply chain costs, partially offset by weakness in the direct-to-consumer (DTC) business.
- Broadly speaking, the analyst believes Black Rifle is in the early stages of multi-year growth, helped by its move to an omni-channel model.
- The analyst added that the success of RTD products and new outposts, as well as expansion into the FDM channel should allow for long-term growth.
- The analyst believes that Black Rifle’s strong multi-year growth profile combined with its differentiated positioning, strong customer loyalty and support from veterans should warrant a premium valuation.
- The analyst is forecasting inline sales growth of 29.5% to ~$93 million, reflecting gains from new distribution of bagged coffee and K-cups Walmart Inc. WMTcontinued strength in RTD products, new store openings and higher product prices partially offset by weakness in DTC and a temporary issue in RTD production.
- For 2023, the analyst is forecasting total revenue growth of 66% to about $500 million.
- Price promotion: BRCC shares are trading unchanged at $5.95 on the last check Monday.
- Photo via company
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