Mizuho Securities analyst John J. Baumgartner initiated coverage on Utz Brands Inc UTZ with a Buy rating and a price target of $19.
The analyst says UTZ is poised for market share expansion through value-accretive M&A and organic growth.
Also, the analyst expects normalized growth of +3% in the salty snack market, thanks to higher frequency of snacking, innovation, and a shift from sweet alternatives.
Baumgartner projects UTZ to maintain a share in legacy "core" markets (8%); ~20 states largely in the Mid Atlantic & Northeast, comprising 59% of net sales.
In 2024 and beyond, the analyst projects UTZ to leverage post-COVID development, including 2019-2022 household penetration (+3.5 million relative to +2.2 million for the salty snacks category), and direct-store-delivery (DSD) market routes (+30% to 2,100+).
The analyst anticipates network optimization and automation to drive significant cost savings, which includes increased productivity through FY26 (~4.5% of COGS), thereby underpinning guidance for ~300bps of EBITDA margin expansion.
Price Action: UTZ shares are trading lower by 1.35% at $15.37 on the last check Wednesday.
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