Some Acushnet Fans Sidelined, Looking For A Better Entry Point

Wells Fargo remains on the sidelines of Acushnet Holdings Corp GOLF, looking for better entry points, even as it stays positive on the company’s execution amid industry rationalization and U.S. market softness.

Rating And Tailwinds

The analyst maintains his Market Perform rating on Acushnet given competition from Costco Wholesale Corporation COST's Kirkland Signature golf ball and pending Taylor Made sale.

“We believe the probability of a private buyer is higher versus GOLF/ELY [Callaway Golf Co ELY] given the likely premium asking price and each company's relative portfolio positioning,” Conder wrote in a note.

Further Justification

The analyst believes the company has lots of tailwinds in its favor, including premium brand market share gains, balanced product portfolio and integration opportunities.

Conder, who has a valuation range of $20–$22 on the stock, has updated his 2016/17 adj EPS view to $1.25/$1.15 (prior $1.24/$1.15.

“We view GOLF as the industry benchmark, but continue to wait for modestly better valuation points before becoming more constructive,” Conder added.

At last check, Acushnet shares were up 8.77 percent at $21.08.