Middleby Stock Rises After Strategic Review Plan Announcement, Retail Turns Bullish

Middleby Corp (MIDD) stock gained 3% on Monday after the kitchen equipment maker said it had launched a strategic review and is considering several options, including a potential separation of its food processing and residential kitchen business units.

The company said the strategic review began last year and is being undertaken as it believes there is unrealized value in its business portfolio.

The Elgin, Illinois-based company said it is in the advanced stages of the review and expects to conclude it within the next few months.

Separately, at least two brokerages raised the price target of the firm, which has a market capitalization of about $9.1 billion.

The price target hikes followed a report by the Wall Street Journal last week that said Garden Investments, a new firm started by Trian Fund Management co-founder Ed Garden, has accumulated an almost 5% stake in Middleby and is looking to buy more.

The report, citing people familiar with the matter, said that Garden Investments is planning to push for a renewed focus on Middleby’s core commercial food service unit while reviewing other parts of the business, including its residential segment.

Garden Investments would also look for board seats and a different capital allocation approach, the report added.

According to The Fly, KeyBanc raised Middleby's price target to $185 from $160 and said Garden is a credible investor that current shareholders are likely to support as a change agent.

Canaccord analyst Brian McNamara also lifted its price target to $192 from $155, as per TheFly.

Retail sentiment on Stocktwits flipped to ‘bullish’ (58/100) territory from ‘bearish’(37/100) a day ago, while retail chatter remained ‘high.’

The food processing and residential segments contributed 18% and 19%, respectively, to the Middleby’s revenue till the third quarter of 2024.  

The stock had gained 20.8% over the past year.  

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