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On Friday, Benchmark analysts reiterated their Buy rating on Westrock (NYSE:WRK) Coffee Co. (NASDAQ:WEST) with a consistent price target of $10.00, despite the stock trading near its 52-week low of $5.28. The reaffirmation follows the company’s fourth-quarter earnings release, which closely aligned with market expectations. Westrock Coffee reported revenues of $174 million, slightly below the consensus estimate of $176 million, and an Adjusted EBITDA of $13.3 million, nearly meeting the anticipated $13.7 million. According to InvestingPro data, the company’s annual revenue stands at $850.7 million, though it currently operates with significant debt of $588.8 million.
The company has also revised its full-year 2025 Adjusted EBITDA forecast, now projecting between $60 million and $73 million. This updated guidance is more conservative compared to the previous range of $80 million to $100 million and falls below the consensus estimate of $77.6 million. The adjustment reflects the anticipated timeline for production lines to become operational at the Conway Facility Engineering & Integration (FE&I) center.
According to Benchmark’s analysis, the near-consensus results demonstrate Westrock Coffee’s solid performance in the fourth quarter of 2024, which ended on March 11. The analysts expressed confidence in the company’s future, particularly regarding the commercialization of the Conway facility. They believe the success of this initiative is a matter of timing rather than uncertainty, indicating a positive outlook for the company’s operational capabilities.
Westrock Coffee’s latest financial update and the subsequent analyst commentary highlight the company’s efforts to align its production capabilities with market demands. The Benchmark team’s continued endorsement reflects their belief in the company’s strategy and potential for growth, despite the revised earnings guidance for the upcoming fiscal year.
In other recent news, Westrock Coffee Company reported its fourth-quarter earnings, which fell short of analyst expectations. The company disclosed a Q4 EPS of ($0.26), missing the consensus estimate by $0.23, and revenue of $228.98 million, which was below the anticipated $252.52 million. For the full year ending December 31, 2024, Westrock Coffee experienced a net loss increase to $80.3 million, compared to a $34.6 million net loss in 2023, with net sales slightly decreasing by 1.6% to $850.7 million. Despite these challenges, the company saw a 10% increase in gross profit, reaching $153.8 million.
Westrock Coffee also adjusted its guidance for 2025, projecting consolidated adjusted EBITDA of $66.5 million, with expectations of 35% year-over-year growth. The company’s CEO, Scott T. Ford, highlighted strategic advancements and new major brand relationships, which are expected to drive future growth. Stifel analysts maintained a Buy rating and a $12.00 price target for Westrock Coffee, viewing 2025 as a transitional year with improving EBITDA despite ongoing scale-up costs at the Conway facility. The company is focusing on expanding its capabilities and has completed automation of new packaging lines at its Conway facility.
Westrock Coffee’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. The company anticipates significant growth driven by volume increases in its core coffee business and the scaling up of ready-to-drink can volumes starting in the second quarter of 2025. Despite missing EPS and revenue forecasts, the company remains optimistic about its growth trajectory, supported by strategic initiatives and new contracts.
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