Middleby Corp: Upgrade to Overweight; Dec 27 PT $147

We are upgrading the shares of MIDD to Overweight from Neutral with a Dec 27 PT of $147 using ~11.5x FY27 EV/EBITDA and ~16x FY27 P/E, both roughly in line with the current valuation. This price target represents ~6% FCF yield vs. its historical average of 8%. We believe the recent sell-off was primarily driven by an underwhelming 2Q margin print that should improve in the coming quarters and as event-driven investors lightened/exited their holdings after the MFP spin-off in July. Following the post-2Q26 sell-off, we see an attractive setup as expectations for 2H26 appear low and MIDD should still be able to achieve its FY26 guidance despite investor skepticism around 3Q26 and implied 4Q26 margin progression after a 110bps EBITDA margin miss (excluding tariff refunds). We expect incremental pricing and strategic savings (~$35MM by 2028), alongside improving mix and the ramp of the new ice/beverage facility, to support a return to YoY EBITDA margin leverage in 4Q26. Looking beyond 2026,