Black Rifle Will Report Solid 4Q22 Earnings & 2023 Outlook, Analyst Says

Telsey Advisory Group analyst Sarang Vora reiterated an Outperform rating on the shares of BRC Inc BRCC (Black Rifle Coffee Company) with a price target of $12.
The analyst expects a solid 4Q22 earnings report and 2023 outlook, generally in line with the business update provided at the 2023 ICR Conference on January 9.
In the analyst's view, Black Rifle should continue to benefit from new distribution of bagged coffee and k-cups at food, drug and mass (FDM) retailers, ongoing strength of its ready-to-drink (RTD) products, new store openings, higher product prices, and tailwinds from lower coffee prices and supply chain costs, partly offset by the softness in the direct-to-consumer (DTC) business.
Broadly, the analyst believes Black Rifle is in the early stages of multi-year growth, supported by its shift to an omni-channel model.
The analyst added that the success of RTD products and new outposts, as well as the expansion into the FDM channel, should provide a long runway of growth.
The analyst believes Black Rifle's strong multi-year growth profile, combined with its differentiated positioning, high customer loyalty, and support of veterans, should command a premium valuation.
The analyst projects inline sales growth of 29.5% to ~$93 million, reflecting gains from the new distribution of bagged coffee and k-cups at Walmart Inc. WMT, ongoing strength of RTD products, new store openings, and higher product prices, partly offset by the softness in DTC and a temporary RTD production issue.
In 2023, the analyst projects total sales growth of 66% to about $500 million.
Price Action: BRCC shares are trading flat at $5.95 on the last check Monday.
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