Goldman upgrades Utz to buy, says snack stock can rise nearly 30%

Snack company Utz Brands gives investors upside in a consumer stock despite concerns about inflation, according to Goldman Sachs. Analyst Jason English upgraded the salty foods stock to buy from neutral, saying in a note to clients that Utz is an attractive name in a category that has a solid foundation in an inflation-resistant category. “We see an above average top and bottom line growth outlook given the company’s (1) strong position in the attractive salty snack category, which benefits from faster growth, lower private label exposure, and better pricing power and (2) strong in-market execution that, with the benefit of acquired brands and organic initiatives, is driving distribution and market share gains that we believe can continue,” English wrote. Utz appears to be its gaining on its peers after falling behind in recent years, according to Goldman. “We see it has gained modest market share year to date, which compares to slight share losses from 2018-21. Its year-to-date share gains have been driven by pretzel chips, dips, potato chips, and tortilla chips, which together constitute nearly 2/3rd of its retail sales, partly offset by losses within pork rind and cheese snacks,” English wrote. Shares of Utz are down more than 22% year to date, and English said the stock is now at a “compelling entry point.” Goldman set a price target of $16 per share, which is nearly 30% above where the stock closed on Thursday. — CNBC’s Michael Bloom contributed to this report.

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