B. Riley Financial upgraded Compass Diversified Holdings (CODI) to Buy from Neutral. Analyst Timothy D'Agostino raised the price target from $11 to $15. The revision follows a solid second-quarter performance and a strengthened outlook for 2027.
The upgrade reflects expectations that the company will divest a subsidiary by the end of 2026. This move aligns with management's strategy to deleverage through asset sales and organic growth. The analyst also anticipates potential capital returns starting in 2027.
Compass Diversified recently appointed long-term employee Zach Sawtelle as its next CEO. Shares rose 4.7% in premarket trading following the announcement. The company currently trades at a Price-to-Sales ratio of 0.45, which sits significantly below its historical median.