Middleby Stock Sees Opportunity Amidst Recent Drop

Middleby (MIDD) has seen its stock drop by 12.3% after releasing its first earnings report since spinning off its food processing unit, Midera Food Processing, on July 6.

The company's new structure and raised guidance make this a good opportunity for investors to own Middleby, according to experts.

Middleby has become a pure-play commercial foodservice business after the spin-off, with management projecting sales growth between 6% and 8% in the foodservice business this year. Its earnings per share (EPS) guidance implies a price-to-earnings (P/E) ratio of under 17.5.

This is comparable to large restaurant chains such as Yum! Brands and McDonald's, which suggests that Middleby's stock may be undervalued after the recent drop.