Stephens projects Callaway stock surge in 2022

Investment banking firm reiterates its overweight rating; Touts an improving supply chain and growing Topgolf traffic as positives


Callaway Golf continues to ride not only the golf industry's recent positive surge, but the company's own uptick.

And Stephens Inc., a privately held investment banking firm, is clearly taking notice, expecting Callaway's stock to surge more than 90 percent in 2022.

Analyst Daniel Imbro, who covers the stock for Stephens, reiterated his overweight rating on Callaway and made it a top pick in a note to clients on Monday.

"We believe that Callaway has a number of catalysts ahead of it, with an analyst day upcoming in 2Q, an improving supply chain, and Topgolf traffic improving through 1Q," he wrote. "We believe that management’s guidance (calling for continued growth in golf equipment, apparel and Topgolf) should dispel concerns around a slowing golf backdrop.

"We believe this is an important investment consideration: the growth in golf was occurring pre-Covid, not just because of the pandemic."

Of the 12 analysts who cover the stock in February, eight have strong buys or buys on the stock. Four have holds.

Callaway’s stock has underperformed year-to-date, falling more than 16%. The company acquired entertainment venue company Topgolf in 2021.

Stephens kept its price target on Callaway at $45 per share. That target is 96% above where the stock closed on Feb. 11, a day after the company released its Q4 report.