Atkore stock target cut to $80 by KeyBanc, maintains Overweight

On Wednesday, KeyBanc Capital Markets adjusted its outlook on Atkore International Group Inc . (NYSE:ATKR), a leading manufacturer of electrical, safety, and infrastructure solutions. The firm’s analyst, Jeffrey Hammond, revised the price target downward to $80 from the previous $105, while still maintaining an Overweight rating on the company’s shares. Currently trading at $63.91, with a P/E ratio of just 6.09x, InvestingPro analysis suggests the stock is significantly undervalued. For detailed valuation metrics and 15+ additional ProTips, visit the Most Undervalued Stocks page.

The adjustment followed Atkore’s financial results for the first quarter of fiscal year 2025, which showed a 12% year-over-year revenue decline. Hammond expressed disappointment due to a "painful reset on pricing" but noted that Atkore’s management seems to be taking a more proactive stance with their updated forecast for fiscal year 2025. Despite these challenges, the company maintains strong profitability with a trailing twelve-month EPS of $10.40 and receives a "GOOD" financial health score from InvestingPro. The revised outlook anticipates that pricing for PVC conduit will return to pre-pandemic levels by the end of the fiscal year.

Despite the reduced price target, Hammond believes that the long-term risk/reward profile for Atkore remains positive. The new forecast is seen as setting a more reasonable expectation, which could offer potential upside. This optimism is partly based on the possibility of the Trump administration taking action against the dumping of steel conduit, which could positively impact Atkore’s market. The company’s strong financial position is evidenced by its current ratio of 3.03, indicating ample liquidity to meet short-term obligations.

In his commentary, Hammond stated, "Disappointed, but Sticking with It; Following ATKR’s F1Q25 earnings, while disappointed by another painful reset on pricing, we feel management is being more proactive with the updated FY25 outlook, implying PVC conduit pricing returns to pre-COVID levels exiting FY25." He added that although it is challenging to pinpoint the exact timing for a market bottom, the updated outlook from Atkore’s management appears to establish a more achievable benchmark.

Atkore’s financial performance and market position continue to be closely monitored by investors, as industry dynamics and regulatory actions could influence the company’s trajectory in the near to medium term.

In other recent news, Atkore Inc. has been the subject of several major developments. The company recently reduced its profit forecast for fiscal year 2025, with the adjusted earnings per share (EPS) projection lowered to a range of $5.75 to $6.85, which is significantly below the consensus estimate. First-quarter earnings were reported at $1.63 per share, slightly above analyst estimates, but quarterly revenue fell short at $661.6 million. Keybank analyst Jeffrey D. Hammond noted an expected decrease in shares following these adjustments.

In other developments, Atkore’s shareholders recently approved executive pay and elected nine directors at their Annual Meeting. The company’s Certificate of Incorporation was also amended to limit the liability of certain officers. Atkore’s relationship with Deloitte & Touche LLP as an independent registered public accounting firm was ratified for the fiscal year ending September 30, 2025.

RBC Capital Markets identified Atkore as facing increased competition in the electrical steel conduit market, prompting investor concern. However, RBC Capital Markets also boosted the price target for Atkore shares to $102 while maintaining a "Sector Perform" rating. Meanwhile, Loop Capital lowered its stock outlook for Atkore to $115 from $130, citing PVC pricing and competitive pressures, but retained a Buy rating on the stock. These are the latest developments in Atkore’s financial journey.

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