Black Rifle Will Report Solid 4Q22 Earnings & 2023 Outlook, Analyst Says

  • Telsey Advisory Group analyst Sarang Vora reiterated an Outperform rating on the shares of BRC Inc BRCC (Black Rifle Coffee Company) with a price target of $12.
  • The analyst expects a solid 4Q22 earnings report and 2023 outlook, generally in line with the business update provided at the 2023 ICR Conference on January 9.
  • In the analyst's view, Black Rifle should continue to benefit from new distribution of bagged coffee and k-cups at food, drug and mass (FDM) retailers, ongoing strength of its ready-to-drink (RTD) products, new store openings, higher product prices, and tailwinds from lower coffee prices and supply chain costs, partly offset by the softness in the direct-to-consumer (DTC) business.
  • Broadly, the analyst believes Black Rifle is in the early stages of multi-year growth, supported by its shift to an omni-channel model.
  • The analyst added that the success of RTD products and new outposts, as well as the expansion into the FDM channel, should provide a long runway of growth.
  • The analyst believes Black Rifle's strong multi-year growth profile, combined with its differentiated positioning, high customer loyalty, and support of veterans, should command a premium valuation.  
  • The analyst projects inline sales growth of 29.5% to ~$93 million, reflecting gains from the new distribution of bagged coffee and k-cups at Walmart Inc. WMT, ongoing strength of RTD products, new store openings, and higher product prices, partly offset by the softness in DTC and a temporary RTD production issue.
  • In 2023, the analyst projects total sales growth of 66% to about $500 million.
  • Price Action: BRCC shares are trading flat at $5.95 on the last check Monday.
  • Photo Via Company
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