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On Tuesday, BofA Securities adjusted its stance on Albany International Corp (NYSE:AIN), reducing the price target on the company’s stock from $80.00 to $75.00. The firm has kept its Underperform rating on the stock. The revision comes after Albany International encountered additional charges in its fourth-quarter 2024 results, pointing towards potential margin difficulties in the future. Currently trading at $72.83, the stock appears fairly valued according to InvestingPro analysis, with a P/E ratio of 25.6x and an EV/EBITDA multiple of 11x.
BofA Securities analyst Kristine Liwag expressed concerns about the company’s growth prospects for 2025, citing persistent obstacles that could hinder progress. The Machine Clothing (MC) segment of Albany International has been affected by tariffs and a lack of strong demand, which has led to a 1.9% year-over-year revenue decline. Efforts to discontinue unprofitable products and improve operations have been noted, but these changes have not yet resulted in the anticipated positive growth. Despite these challenges, InvestingPro data shows the company maintains a strong financial position with a current ratio of 3.23 and operates with moderate debt levels. Discover more insights with InvestingPro’s comprehensive research report, featuring detailed analysis of Albany International’s financial health and growth prospects.
The acquisition of Heimbach, aimed at enhancing Albany International’s MC portfolio, has not delivered the expected accretive growth. The integration of Heimbach into the MC segment continues, but the acquisition has fallen short in terms of contributing to margin improvement. Liwag highlighted that while Albany International’s management has suggested the potential to pass tariff-related price increases to customers, the lack of clarity on this strategy has limited confidence in the company’s ability to improve demand or margins significantly. The company maintains a gross profit margin of 32.8% and has generated $138.2 million in levered free cash flow over the last twelve months.
The analyst’s report emphasizes the challenges faced by Albany International in its Machine Clothing segment due to tariff risks and market softness. The Heimbach acquisition’s failure to meet margin targets adds to the company’s struggles, as it attempts to navigate through the current market conditions.
Albany International’s stock price target reflects the analyst’s view that the company may continue to face margin challenges and limited growth in the near term. The Underperform rating suggests that BofA Securities advises caution to investors considering Albany International’s stock at this time.
In other recent news, Albany International Corp. reported its fourth-quarter 2024 earnings, which missed Wall Street expectations. The company posted an earnings per share (EPS) of $0.58, falling short of the forecasted $0.65, and revenue of $286.9 million, below the consensus estimate of $299.69 million. This performance marks a significant decline from the previous year’s fourth quarter, with net revenue decreasing by 11.3% and gross profit dropping by 24.6%. Despite these challenges, Albany International achieved record full-year revenue of $1.25 billion, driven by organic growth and acquisitions. Additionally, the company has provided guidance for 2025, projecting total revenue between $1.165 and $1.265 billion, which is below the consensus estimate of $1.29 billion. The company has also announced the approval of stock-based compensation for its executives to incentivize performance and retain key personnel. Furthermore, Albany International disclosed the resignation of its Vice President – Controller and Chief Accounting Officer, John J. Tedone, with CFO Robert Starr stepping in as interim accounting head. These developments reflect Albany International’s ongoing efforts to stabilize and improve its operations amid financial challenges.
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