AOUT - American Outdoor Brands rallies after B. Riley turns bullish

B. Riley Securities upgraded American Outdoor Brands ( NASDAQ: AOUT ) to a Buy rating after having it set at Neutral.

Analyst Eric Wold thinks a better-than-feared situation could be setting up with the next AOUT earnings report, especially with the expectation that healthy retail inventory levels will drive normalized re-stocking patterns into the holiday season,

"The perceived risk inherent in our downgrade has now been priced into shares, but that the current valuation does not reflect the opportunity ahead with an elevated outdoor activity participant base and a brand portfolio that may be attractive to other entities," he noted.

Wold also suggest AOUT should have a M&A premium due to the the company could become an acquisition target due to its profitability potential and broad reach into the retail channel with consumers directly.

B. Riley assigned a price target of $11 to AOUT.

Shares of America Outdoor Brands ( AOUT ) rose 2.96% in premarket trading to $8.00 vs. the 52-week trading range of $7.14 to $28.14.

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