By Katherine Hamilton
Shares of Topgolf Callaway Brands climbed Thursday after Jefferies analysts upgraded the stock to buy from hold, arguing the market price undervalues the sports company.
The stock rose about 14% to $8.95 in morning trading. It has fallen about 40% over the past six months.
Jefferies analysts also increased Topgolf Callaway's price target to $13 from $11.
On updating their sum-of-the-parts analysis, evaluating each segment of the company's business, the analysts found the stock's total value to be about 65% higher than its last closing price. Topgolf Callaway is priced lower than competitor Acushnet Holdings, but it has grown faster over the past three years, said the analysts.
The analysis also suggests the market is not ascribing any value to the company's Topgolf entertainment segment, which it acquired in 2021. While the segment's fundamentals are weak, the analysts said they believe it has growth potential that could mean Topgolf Callaway's stock is undervalued.
Write to Katherine Hamilton at katherine.hamilton@wsj.com
(END) Dow Jones Newswires
January 02, 2025 11:00 ET (16:00 GMT)
Copyright (c) 2025 Dow Jones & Company, Inc.
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