Utz Brands' (UTZ) Q2 setup looks constructive amid broader category challenges, RBC Capital Markets said in a Tuesday note.
RBC forecast EPS of $0.18 on revenue of $362 million for the quarter. The Q2 results are due July 31.
"While last quarter benefited from the company's bonus
pack promotion, we think our estimate should at least be achievable as distribution gains continue to ramp and with some help from the Easter timing shift," the report said.
"Despite broader category challenges, the company continues
to see relatively robust sales/volume growth along with share gains, which support our view," it added.
RBC said Utz presents a compelling buy case over the long term despite the ongoing pressure in the salty snacks category.
The company is gaining pure-play exposure to a lucrative category in consumer staples and also offering upside from share gains due to geographic expansion, according to the note.
RBC kept its outperform rating with a $20 price target.
Price: 14.16, Change: +0.07, Percent Change: +0.50
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