BofA Securities initiates Redwire stock with Underperform rating on ownership concerns

Published 18/08/2025, 12:00
BofA Securities initiates Redwire stock with Underperform rating on ownership concerns

Investing.com - BofA Securities initiated coverage on Redwire (NYSE:RDW) with an Underperform rating and a $10.00 price target on Monday. According to InvestingPro data, the stock has declined over 62% in the past six months, with analysts’ targets ranging from $13 to $28.

The firm cited concerns about the concentrated ownership structure of Redwire, noting that two private equity firms control approximately 87% of outstanding shares following the Edge Autonomy acquisition and subsequent capital raise. InvestingPro analysis indicates the stock’s high volatility, with a beta of 2.53, though the company maintains a healthy current ratio of 1.46.

BofA Securities analyst Ronald Epstein pointed out that after the second quarter, these major shareholders filed a shelf registration to potentially unwind more than 75% of their shares in future transactions.

The investment bank views this concentrated ownership and planned monetization as factors that could limit stock appreciation in the near term.

BofA also expressed concern that these ownership dynamics could potentially impact Redwire’s access to capital markets to fund operations, while adding that the concentrated shareholder structure might introduce additional volatility to the stock.

In other recent news, Redwire Corporation reported its second-quarter earnings for 2025, revealing a significant earnings miss. The company posted an earnings per share (EPS) of -$1.41, which was substantially below the forecasted -$0.13, resulting in a major earnings surprise. Revenue for the quarter came in at $61.8 million, falling short of the analyst expectations of $82.75 million. Following these results, H.C. Wainwright adjusted its price target for Redwire stock to $22.00, down from $26.00, while maintaining a Buy rating. The firm cited the disappointing earnings as a key factor in its decision. In addition to financial updates, Redwire announced the release of Acorn 2.0, an updated version of its modeling and simulation software for the aerospace and defense sectors. This new software version incorporates agent-based modeling and artificial intelligence to tackle complex simulation challenges. These developments highlight recent changes and updates within Redwire Corporation.

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