Benchmark maintains Buy rating and $10 target for Westrock Coffee stock

On Wednesday, Benchmark analyst Todd M. Brooks maintained a Buy rating and a $10.00 price target on Westrock (NYSE:WRK) Coffee Co. (NASDAQ: WEST), despite a more conservative outlook on the company’s first-quarter revenues for 2025. Brooks noted that the quarter was characterized by ramping commercialization activities, which are expected to contribute more significantly to the company’s revenues throughout the remainder of the year. Currently trading at $5.64, the stock sits between analyst targets ranging from $9 to $13, according to InvestingPro data.

Westrock Coffee’s first-quarter performance has been affected by the decline in consumer confidence that has been observed since January. This downturn in consumer sentiment is anticipated to have led to end market demand falling short of initial expectations. As a result, Benchmark has adjusted its revenue estimates for the first quarter of 2025 to $212 million, down from the previous forecast of $221 million. The company’s stock has reflected these challenges, declining 9.41% in the past week and 43.31% over the last year.

Despite the revised revenue estimates, Benchmark continues to support their Buy rating for Westrock Coffee stock. The analyst’s commentary suggests that while immediate revenues may not meet earlier projections, the outlook for the company’s financial performance over the coming months remains positive. InvestingPro analysis reveals several key factors to watch, including the company’s significant debt burden and expectations for profitability this year. Investors can access 12 additional exclusive ProTips and comprehensive financial metrics through InvestingPro’s detailed research reports.

The price target set by Benchmark reflects confidence in Westrock Coffee’s future prospects, with the analyst expressing belief in the company’s ability to recover and grow as the year progresses. The maintained Buy rating indicates that Benchmark views the stock as a potentially good investment, even with the short-term adjustments to revenue expectations.

Brooks’ analysis and the maintained price target and rating are based on Westrock Coffee’s ongoing commercialization efforts and the anticipated impact on revenue growth later in the year. Investors will be watching closely to see if the company’s performance aligns with Benchmark’s projections as 2025 progresses.

In other recent news, Westrock Coffee Company announced its fourth-quarter earnings, which showed a revenue of $228.98 million, falling short of the expected $252.52 million. The company reported a net loss of $24.6 million for the quarter, widening from a $20.1 million loss in the prior year. Despite missing earnings per share (EPS) and revenue forecasts, Westrock Coffee reported a 6.5% increase in net sales and a 9.2% rise in gross profit for the quarter. The company’s Beverage Solutions segment saw a 29% increase in adjusted EBITDA, while the Sustainable Sourcing & Traceability segment experienced a 34.9% increase in net sales.

Westrock Coffee adjusted its 2025 guidance, now forecasting EBITDA between $60 million and $73 million, which includes $15 million in scale-up costs. This update is more conservative than previous estimates and reflects ongoing operational costs at its Conway facility. Analysts from Benchmark and Stifel maintained their Buy ratings on Westrock Coffee, with price targets of $10 and $12, respectively. Stifel analyst Matthew Smith noted that 2025 is expected to be a transitional year with improving EBITDA despite scale-up costs.

The company emphasized its strategic advancements, including automation of packaging lines and new product launches at its Conway facility. These developments are part of Westrock Coffee’s efforts to align production capabilities with market demands, though the revised earnings guidance has led to cautious investor sentiment. CEO Scott Ford highlighted the company’s progress in securing major brand relationships and anticipated growth in the coming years.

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