Callaway Golf stock (NYSE: ELY) is now averaging a “buy” rating from analysts after earnings beat the consensus estimate.
We interrupt your regularly scheduled avalanche of “golf is dead” sentiment to bring you some positive news: Callaway is on a roll.
Just in the last few weeks, Callaway has signed former world #1 amateur Ollie Schniederjans, added a director to the board, declared a quarterly dividend, and introduced their latest product line.
The company based in Carlsbad, CA reported earnings of $0.15 EPS (earnings per share) for the second quarter, beating analysts estimate of $0.10 by a large margin. Revenue was up 6.5% over last year, at $231 million. A quarterly dividend of $0.01 was announced and will be paid on September 11.
As a result, the majority of analysts now see the stock as a buy and a few have raised their target price up to $13. That would be a 44% increase in the stock price, currently trading around $9 per share.
Diamond Foods executive and former touring pro Linda Segre becomes the ninth member of the board of directors.
Enough With The Wall Street Talk, What Does It All Mean?
It means life is good for Callaway and projected to get even better. If you dabble in the stock market and aren’t afraid of an impending bear market, this may be a way to represent your love of golf in your portfolio.
It means Big Bertha (and Chrome Soft) is the real deal. We briefly mentioned yesterday that they have taken over the #1 spot in sales of irons, hybrids, and fairway woods thanks to the positive reviews and popularity of the relaunched Big Bertha line. The newest addition, the Great Big Bertha, was also announced and will be available next month.
If you’re bullish on golf’s recovery, like we are, it could possibly be a signal of the industry stabilizing. Similar to the end of a recession, what if the dark days for our sport actually ended months ago, but we have to wait for the numbers to catch up so the media can officially announce it after the fact?
Maybe the greedy, price-gouging big box sporting goods stores and the over-marketing club makers needed to fall from the top before the golf industry could be resuscitated. Could Callaway be making the necessary adjustments, that TaylorMade can’t seem to do, for a post-Recession golfing public more cautious with their disposable income?
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