GOLF - Acushnet Holdings is tipped by Morgan Stanley to have issued conservative guidance

2023-05-08 07:50:03 ET

Acushnet Holdings ( NYSE: GOLF ) impressed Morgan Stanley with another strong earnings report that included a clean beat on both lines and strength across all segments.

Analyst Brian Harbour noted the 25% growth in the U.S. segment stood out with both golf balls and clubs seeing double-digit growth. While the Acushnet ( GOLF ) full-year outlook was unchanged, Harbour thinks the numbers could prove to be a little conservative if consumer spending trends hold up.

"Some of the sizable revenue beat (sales +13% y/y) was likely due to the relatively strong consumer environment in 1Q, GOLF's new product launch cadence as well as some pull forward of custom apparel shipments into March but remains impressive considering total US golf equipment & apparel sales were down 1% in the quarter according to Golf Datatech."

The overall view on GOLF is that it has best-in-class management with category dominant brands in the golf industry, catering to dedicated, high end customers; unique control over the supply chain is an asset. GOLF was observed to have demonstrated an ability to develop new products regularly to drive sales in all segments. Importantly, a dedicated golfer base is noted to drive relatively consistent sales of consumables. Looking ahead, GOLF's history of solid capital returns is expected to continue. However, Morgan Stanley kept the consumer goods stock slotted at Equal-weight due to earnings multiples that have jumped back to pre-COVID levels. A normalized pace of sales and earnings growth is anticipated for 2023-2024.

More on Acushnet Holdings:

• Read breakdowns on Acushnet from Seeking Alpha analysts
• Check out the earnings report highlights
• View the growth metrics
• See the financial and valuation comparisons to sector peers
• Dig into the Seeking Alpha Quant Rating

For further details see: