MODG: Continued Equipment Demand And Asset Monetization Will Shape Future Performance

Analysts have raised their price target for Topgolf Callaway Brands to $14 from $13, citing continued healthy demand in the core equipment business and positive developments at Topgolf SVS as key reasons for their updated outlook.

Analyst Commentary

Recent research from Wall Street highlights a mix of optimism and caution surrounding Topgolf Callaway Brands, with updated ratings and price targets reflecting both company execution and broader consumer trends.

• Bullish analysts have raised their price targets following a strong quarterly performance, pointing to ongoing healthy demand in the core equipment business.
• Positive financial inflection at Topgolf SVS is seen as a catalyst for further growth and value creation.
• Valuation arguments center on the sum-of-the-parts analysis. This suggests significant upside potential as options for a spin or sale of certain assets draw closer.
• Long-term shifts in consumer wellness priorities, especially among younger demographics, are expected to support Topgolf Callaway’s growth trajectory in both equipment and experiential offerings.

• Some cautious analysts initiate coverage with a neutral outlook, citing a preference for asset-light business models and signaling that Topgolf Callaway's approach may face execution risks compared to scalable peers.
• Current valuation may already reflect much of the near-term upside. This makes dramatic further appreciation dependent on the success of asset monetization or continued robust consumer demand.
• While growth prospects remain positive, competition in the health, wellness, and leisure segments requires continued innovation and disciplined cost management to sustain margin improvement.

What's in the News

• Topgolf Callaway Brands raised its consolidated full-year 2025 earnings and revenue guidance following strong third quarter results and an improved outlook. The company now projects Net Revenues of $3.90 billion to $3.94 billion, up from previous guidance. Guidance for Topgolf venue sales was also upgraded. (Company guidance)
• The company confirmed consolidated earnings guidance for the fourth quarter of 2025, expecting net revenues between $763 million and $803 million. (Company guidance)

Valuation Changes

• Fair Value Estimate has risen slightly, increasing from $10.50 to $11.06 per share.
• Discount Rate has fallen, moving from 12.32 percent to 11.24 percent. This reflects a lower perceived risk profile.
• Revenue Growth Forecast has improved, with the expected decline moderating from -0.47 percent to -0.10 percent.
• Net Profit Margin projection has increased from 5.14 percent to 5.79 percent. This indicates higher anticipated profitability.
• Future Price-to-Earnings (P/E) Ratio has declined from 13.0x to 11.9x. This suggests the stock may be viewed as more attractively valued relative to expected earnings.