On Friday, Roth/MKM maintained a Buy rating on Sow Good (NASDAQ: SOWG) but lowered the price target to $17.00 from $21.00.

The adjustment follows the company’s second-quarter 2024 financial report, which resulted in a revision to estimates. The new 2024 forecasts assume that Sow Good deliveries will resume late in the third quarter and that major retailers Five Below (NASDAQ:) and Target will recalibrate their orders at lower levels than originally expected.

The company has also lowered its revenue forecast for fiscal year 2025, citing lower productivity at these large retailers. However, the impact on Sow Good’s 2025 EBITDA is expected to be less significant.

This is due to an expected improvement in gross profit margin (GPM), which should largely offset the impact of scale reduction and deleveraging of selling, general and administrative (SG&A) expenses.

The analyst expressed the belief that Sow Good’s share price could remain in a range in the short term until there is more clarity on the company’s operations. Despite the near-term uncertainty and the lowered price target, the firm reiterates its confidence in Sow Good’s long-term prospects, especially as the company expands its distribution network.

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