B.Riley downgrades Traeger stock rating to Neutral on persistent sales decline

B.Riley downgraded Traeger Inc. (NYSE:COOK) to Neutral from Buy, cutting its price target to $1.50 from $3.00, citing persistent sales weakness across key product categories, particularly grills and accessories, which represent over 70% of revenue. This follows Traeger's Q2 2025 results significantly missing market expectations, reporting an EPS of -$0.01 and revenue of $145.5 million, alongside a 13.6% sales decline. The firm also expressed concern over Traeger's high debt load, approaching six times trailing EBITDA, and sees limited catalysts for share price improvement, underscoring a challenging outlook for the company whose stock has already declined over 51% in the past year.

Analysis

Traeger Inc. faces a significant negative re-rating from Wall Street, underscored by B.Riley's downgrade to Neutral from Buy and a 50% price target reduction to $1.50. This action is rooted in severe and prolonged sales weakness in the company's core product lines, which constitute over 70% of total revenue. Grill sales, representing more than half of revenue, plummeted 22% year-over-year in the second quarter, a negative trend B.Riley expects to persist through at least Q4 2025. This operational decay is directly reflected in Traeger's recent Q2 2025 financial results, which substantially missed market expectations. The company reported a net loss per share of -$0.01 against a consensus forecast for a $0.05 profit, while revenue of $145.5 million fell 12.61% short of the $166.49 million projection. The reported 13.6% quarterly sales decline starkly contrasts with much milder consensus estimates of a 0.2% to 1.2% decrease. Furthermore, the company's balance sheet is under pressure, with debt approaching a high six times trailing twelve-month EBITDA. While a cost-saving program, Project Gravity, is projected to yield $30 million in annualized savings by 2026, analysts express doubt that this will be sufficient to counteract volume pressure from potential tariffs and the overarching decline in consumer demand, offering limited near-term catalysts for a stock that has already fallen over 51% in the past year.

Key Decisions for Investors

• Given the consensus downgrade, significant top- and bottom-line misses, and a lack of near-term positive catalysts, investors should exercise extreme caution and re-evaluate long positions in COOK.
• Potential investors should monitor for a clear stabilization or recovery in grill and accessory sales data before considering an entry, as the current downward trend is projected to continue for several quarters.
• Closely watch the company's leverage, specifically the debt-to-EBITDA ratio, as its approach to 6x signals heightened financial risk that could outweigh the potential benefits of cost-saving initiatives.