What Happened?
Shares of kitchen product manufacturer Middleby (NYSE: MIDD) jumped 3.3% in the afternoon session after Wolfe Research initiated coverage on the stock with an 'Outperform' rating and a $163 price target. The research firm highlighted Middleby's "high-quality, defensive growth business" and its strong position within the commercial foodservice equipment industry. In its note, Wolfe Research pointed to the company's robust profitability, noting a 38% gross margin and over $580 million in free cash flow, which it described as an "underappreciated" aspect of the business.
After the initial pop the shares cooled down to $141.15, up 4% from previous close.
Is now the time to buy Middleby? Access our full analysis report here, it’s free.
What Is The Market Telling Us
Middleby’s shares are somewhat volatile and have had 11 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 22 days ago when the stock gained 3.1% on the news that it announced the acquisition of Oka-Spezialmaschinenfabrik GmbH, a German manufacturer of industrial bakery equipment. The acquired company, Oka-Spezialmaschinenfabrik GmbH, is a German-based designer and manufacturer of industrial equipment for the bakery, confectionery, and pet-food markets, with annual revenues of $12 million. Middleby's CEO, Tim FitzGerald, called the acquisition a "perfect complement and strategic fit," highlighting that it adds important product categories to the company's bakery solutions. The deal is expected to create significant sales synergies by enhancing Middleby's full-line offerings and expanding Oka's market reach beyond Germany. This move also strengthens Middleby's food processing business ahead of its planned spinoff in 2026.
Middleby is up 5.4% since the beginning of the year, but at $141.15 per share, it is still trading 18.4% below its 52-week high of $172.89 from January 2025. Investors who bought $1,000 worth of Middleby’s shares 5 years ago would now be looking at an investment worth $1,464.
Unless you’ve been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) semiconductor stock benefiting from the rise of AI. Click here to access our free report on our favorite semiconductor growth story.
