Topgolf Callaway Brands Corp. (NYSE:MODG) reached a new 52-week high on November 6, 2023, with its stock price climbing to $13.34 during the trading session. The stock ultimately closed at $13.2060 after a volume of 181,272 shares changed hands, marking a significant increase from its previous close of $12.87. This surge reflects growing investor confidence, bolstered by positive adjustments in analyst ratings.
Analyst Ratings and Market Reactions
Several brokerages have recently reassessed their ratings for Topgolf Callaway Brands. Notably, JPMorgan Chase & Co. raised its target price for the stock from $9.00 to $10.00, maintaining a “neutral” rating. Meanwhile, Truist Financial increased its price target from $10.00 to $12.00, assigning a “buy” rating in a report dated November 4, 2023. Roth Capital reaffirmed a “buy” rating with a price target of $14.00, while B. Riley updated its rating to “neutral” with a target of $11.00, up from $9.50. Despite these positive notes, Weiss Ratings issued a “sell (d-)” rating on December 29, 2023. Overall, the consensus rating is “Hold” with an average price target of $11.67, according to data from MarketBeat.
The stock’s performance aligns with the company’s most recent quarterly earnings report, which showed promising trends. Topgolf Callaway Brands reported earnings of ($0.05) per share, surpassing the consensus estimate of ($0.21) by $0.16. Total revenue for the quarter was $465.30 million, although this fell short of the expected $903.96 million. Year-over-year revenue declined by 7.8%, with the previous year’s earnings per share at $0.02.
Stock Buyback Authorization and Institutional Investments
In a strategic move, Topgolf Callaway Brands announced a stock buyback program on January 5, 2023, authorizing the repurchase of up to $200 million in outstanding shares. This initiative, allowing for the buyback of approximately 9.3% of its stock, indicates management’s belief that the stock is currently undervalued.
Institutional investors have also shown increased interest in Topgolf Callaway Brands. Signaturefd LLC significantly boosted its position by 1,669.0% in the second quarter, acquiring an additional 2,904 shares. Similarly, Johnson Financial Group Inc. raised its stake by an astonishing 5,092.9% during the third quarter. Other notable investors include GAMMA Investing LLC, which purchased a new position worth approximately $36,000, and Smartleaf Asset Management LLC, increasing its holdings by 42.3% to 3,893 shares valued at $37,000.
Overall, institutional and hedge fund investors now own approximately 84.69% of Topgolf Callaway Brands’ stock, showcasing a strong institutional backing that could further influence the stock’s trajectory.
Topgolf Callaway Brands, established through the merger of Callaway Golf Company and Topgolf Entertainment Group in July 2022, continues to blend its golf heritage with innovative entertainment offerings. The company caters to a diverse clientele, from golf enthusiasts to casual players, highlighting its commitment to both competitive sports and leisure activities. As it navigates the complexities of the current market, stakeholder confidence and strategic measures will likely play a crucial role in its future performance.
