Traeger Downgraded to Neutral from Buy by B. Riley Securities, PT to $1.5

Traeger Downgraded to Neutral from Buy by B. Riley Securities, PT to $1.5

Title: Traeger Downgraded to Neutral from Buy by B. Riley Securities, PT to $1.5

July 02, 2025 — B. Riley Securities has downgraded Traeger Inc. (TRGR) to a Neutral rating from a previous Buy recommendation, with a price target of $1.5. The downgrade follows the company's second-quarter fiscal 2025 earnings report, which highlighted the impact of tariffs and the ongoing Project Gravity initiative aimed at driving efficiencies and cost savings.

Key Takeaways

Tariff Mitigation and Cost Savings
Traeger expects to offset approximately 80% of a $60 million tariff impact in fiscal 2025 through supply chain efficiencies, pricing adjustments, and cost savings. The company's tariff mitigation efforts include diversifying manufacturing away from China and implementing near-term cost savings measures. These efforts are crucial for preserving profitability and enhancing cash flow, especially in the face of increased tariffs.

Project Gravity
Project Gravity, a major streamlining effort, is designed to drive efficiencies and improve margins. The first phase of Project Gravity, which includes a reduction in force and the centralization of METER's operations, is expected to deliver $30 million in run-rate cost savings. Phase two aims to drive further structural efficiencies and cost savings over the next eighteen months.

Financial Outlook
Traeger's guidance for fiscal 2025 includes revenues of $540 million to $555 million, down 8% to 11% year-over-year, and adjusted EBITDA of $66 million to $73 million. The company's outlook reflects near-term pressure from tariff costs and price increases, but management remains optimistic about the long-term benefits of Project Gravity.

Second Quarter Results
Second-quarter revenues fell 14% to $145 million, and adjusted EBITDA dropped to $14 million. The quarter was impacted by revenue pacing shifts tied to tariff-related dynamics and the timing of sales recognition. Despite these challenges, consables revenue grew 7%, led by strong pellet sell-through and expanded distribution.

Market Reaction
The downgrade by B. Riley Securities comes as investors continue to assess Traeger's ability to navigate the current macroeconomic environment and trade policy challenges. The stock price has responded to the earnings report and the downgrade, reflecting market sentiment around the company's ability to execute on its tariff mitigation strategies and cost-saving initiatives.

Conclusion
Traeger's second-quarter results and the subsequent downgrade by B. Riley Securities underscore the challenges the company faces in the current economic climate. However, the company's strategic initiatives, such as Project Gravity, are positioned to drive long-term shareholder value. Investors will closely monitor Traeger's ability to execute on these initiatives and navigate the near-term challenges posed by tariffs and economic uncertainty.

References
[1] https://www.marketbeat.com/earnings/reports/2025-8-6-traeger-inc-stock/