Traeger Downgraded to Neutral by B. Riley, Price Target Cut to $1.50

B. Riley downgraded Traeger Inc to Neutral from Buy and cut its price target to $1.50 from $3 due to extended sales slump. Grill sales fell 22% YoY in Q2 and are expected to decline through Q4 2025. Accessories sales have logged double-digit declines for four straight quarters and are likely to stay weak through late 2025. The brokerage expects a sustained sales rebound for the stock to break above its recent $2-$3 trading range.

Traeger Inc., a leading manufacturer of wood pellet grills, reported its financial results for the second quarter of 2025, revealing significant misses in both earnings and revenue forecasts. The company posted an earnings per share (EPS) of -$0.01, falling short of the expected $0.05, marking a 120% negative surprise. Revenue was reported at $145.5 million, below the forecasted $166.49 million, resulting in a 12.61% shortfall. Despite these setbacks, Traeger maintained its market leadership in wood pellet grills and received positive feedback for its new Woodridge grill model [1].

Traeger’s Q2 revenues fell 14% year-over-year, with grill revenues dropping by 22%. The company launched the Woodridge grill, priced at $1,150, receiving strong consumer feedback. Traeger implemented Project Gravity, aiming for $30 million in cost savings. The company faces challenges with a shift towards lower-priced grills and competitive pressures in the accessories market [1].

B. Riley & Co. downgraded Traeger Inc. to Neutral from Buy and cut its price target to $1.50 from $3 due to an extended sales slump. Grill sales fell 22% YoY in Q2 and are expected to decline through Q4 2025. Accessories sales have logged double-digit declines for four straight quarters and are likely to stay weak through late 2025. The brokerage expects a sustained sales rebound for the stock to break above its recent $2-$3 trading range [2].

Despite the earnings miss, Traeger’s stock price increased by 3.03% in aftermarket trading, closing at $1.70. This movement suggests that investors may be focusing on the company’s long-term initiatives and product innovations. The stock remains within its 52-week range, with a high of $3.97 and a low of $1.28. Year-to-date, the stock has declined by 29%, though it has shown strong momentum over the past three months according to InvestingPro data [1].

For the fiscal year 2025, Traeger has provided revenue guidance of $540-$555 million, indicating an 8-11% decline. The company expects grill revenues to decline in the high single digits but anticipates a gross margin between 40.5% and 41.5%. Adjusted EBITDA is projected to be between $66 million and $73 million [1].

Executives highlighted the Woodridge grill and Project Gravity as significant long-term opportunities. CEO Jeremy Andress stated, "Woodridge is the best product this company has built in the nearly forty years that we’ve been in business." CFO Joey Hord noted the company’s strategic focus: "Our largest opportunity long-term is to drive increased household penetration and brand awareness" [1].

Traeger faces challenges such as a shift towards lower-priced grills, competitive pressure in the accessories market, and ongoing tariff and supply chain issues. Diversifying manufacturing away from China may present operational risks [1].

References:
[1] https://www.investing.com/news/transcripts/earnings-call-transcript-traeger-misses-q2-2025-earnings-forecasts-93CH-4175238
[2] https://www.briley.com/