What happened
Shares of Mister Car Wash (MCW 0.44%) jumped on Friday after receiving a big upgrade from an analyst at a prominent firm. Prior to that jump in price, the stock was down by around 40% for 2023, and it hit an all-time low earlier this month. But shareholders are doing better Friday with Mister Car Wash stock up 7% as of 1:52 p.m. ET. It had been up as much as 13% earlier in the session.
So what
Baird analyst Justin Kleber was the one speaking positively about Mister Car Wash stock. According to TipRanks, Kleber just upgraded the stock to an outperform rating and gave it a price target of $10 per share. That would amount to an upside of about 75% based on where the stock was trading as of this writing.
Kleber reportedly likes the potential catalyst for Mister Car Wash stock from its new Titanium product. The car wash company offers an unlimited car wash subscription plan that drives 70% of its revenue. In the second quarter of 2023, it rolled out its new Titanium product which protects vehicles and provides a mirror finish.
The initial rollout of Titanium is going well, according to management. And in time, it expects that 10% of its subscription base could upgrade to the Titanium plan, which is what Kleber must be excited about.
Now what
Mister Car Wash's growth has stalled recently. In Q2, its net revenues were only up 5%, and management only expects low single-digit percentage growth for the year. That said, the business is profitable. And the stock is fairly inexpensive at just 22 times earnings. Therefore, if Titanium's strong start can boost profits further, then it is reasonable to expect a decent upside for Mister Car Wash's stock price.
