What happened

Shares of restaurant equipment maker Middleby (NASDAQ:MIDD) 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.