The Middleby Corporation ( MIDD Quick Quote MIDD - Free Report) is gaining from robust backlog level and strong incoming order growth across segments despite adversities from increasing costs and expenses, and foreign exchange headwinds. What’s Aiding MIDD? Business Strength: Middleby’s organic sales are driven by improvements in end-market conditions and solid consumer demand in the Commercial Foodservice and Food Processing segments. Accretive pricing, shifting mix towards higher technology solutions and disciplined cost control policies are driving the company’s Commercial Foodservice Equipment Group segment. The Food Processing Equipment Group segment is benefiting from strong international growth in all end markets and revenue growth across bakery and protein products. Benefits From Acquisitions: Acquired assets are strengthening MIDD’s top line. The company acquired Filtration Automation Inc. in June 2023, expanding itsfood processing portfolio and frying system offerings. It enables the company to provide enhanced automated full-line solutions. The buyout of Flavor Burst (January 2023) complements MIDD’s existing product offerings in the beverage group. The acquisition of Marco Beverage Systems in December 2022 complements the company's existing beverage portfolio, expanding its cold brew dispense, coffee brewers and a variety of hot, cold and sparkling water dispenser offerings. The November 2022 acquisition of Escher Mixers helped Middleby reduce product production costs and eliminate the usage of dough additives to produce premium quality bakery items with a longer shelf life by leveraging Escher’s automated dough mixing solutions and line capacity utilization. Rewards to Shareholders: Middleby’s efforts to reward its shareholders through share repurchases are noteworthy. In 2022 and in the first three months of 2023, it repurchased common shares worth $264.8 million and $48 million, respectively.
In light of the above-mentioned positives, we believe, investors should retain MIDD stock for now, as suggested by its current Zacks Rank #3 (Hold).
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