Please ensure Javascript is enabled for purposes of website accessibility

Why Middleby Shares Jumped 10% Today

By Anders Bylund – Updated Jun 29, 2020 at 4:29PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The leading maker of restaurant-grade ovens, deep fryers, and ventilation systems rose on the wings of a bullish analyst report.

What happened

Shares of restaurant equipment maker Middleby (MIDD 0.09%) rose almost 10% on Monday thanks to a bullish analyst report.

So what

KeyBanc Capital Markets analyst Jeffrey Hammond upgraded Middleby to overweight early Monday morning. The firm placed a $90 price target on the stock, 23% above Friday's closing price. Hammond cited "mounting evidence" that the market for restaurant equipment bottomed out in early April, setting the company up for a solid recovery from that point. Under these circumstances, Middleby looks undervalued at 14 times forward earnings and 11 times free cash flows.

A green charting arrow crashes upward through the ceiling.

Image source: Getty Images.

Now what

Middleby's stock has nearly doubled from March's 52-week lows, but investors have a long way to go before reclaiming the yearly peak at $143 per share. I am inclined to agree with Hammond's assessment here, as Middleby is working with a solid financial safety net. The company had $381 million of cash on hand at the end of March and generated strong bottom-line profits as well as positive free cash flow in the COVID-vexed first quarter.

Selim Bassoul, former CEO, chairman, and president of Middleby, serves as Chief Innovator at The Motley Fool. Anders Bylund has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Middleby. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

The Middleby Corporation Stock Quote
The Middleby Corporation
$123.99 (0.09%) $0.11

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/27/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.