By Sam Boughedda
A Citi analyst downgraded shares of Weber Inc. (NYSE:WEBR) to Sell from Neutral, lowering the price target on the stock to $2.74 from $7 per share.
The analyst said there are currently too many concerns to stay Neutral. Weber shares are down 7.6% Wednesday.
"We have seen WEBR’s sales unwind over the last several quarters as POS traffic has declined & as macro factors like inflation & geopolitical uncertainty have negatively impacted consumer demand. With the macro headwinds still pressuring the global consumer, the demand environment looks uncertain and we believe that WEBR’s topline trends will continue to get worse before they get better," said the analyst.
The analyst added the demand environment for grills looks like it will remain challenging for some time to come, and FY23 sales could look similar to FY19 ($1.30 bn), which would represent a 21% YoY decline to their FY22 estimate.
"As the company’s financials have deteriorated over the last year, WEBR’s leverage ratio has continued to move higher. Given our expectation that the P&L will remain challenged in FY23, we are concerned about the company’s liquidity position and that it may find itself in a position of needing to raise capital," concluded the analyst.