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On Monday, DA Davidson made a significant adjustment to Boise Cascade Company’s (NYSE:BCC) financial outlook, reducing the price target from $155.00 to $125.00. Despite this change, the firm maintains a Buy rating on the stock. The revision follows Boise Cascade’s fourth-quarter performance in 2024, which was described as solid by the firm’s analysts.
Kurt Yinger of DA Davidson pointed out that several factors have led to considerable downward revisions for the company’s full-year 2025 forecasts. The analysts expressed concern over an uncertain timeline for price stabilization in the engineered wood products (EWP) segment, which they found disappointing. InvestingPro analysis reveals that the stock has experienced significant pressure, down 9.98% year-to-date, though technical indicators suggest the stock may be oversold. Subscribers can access 12 additional ProTips and comprehensive financial metrics through InvestingPro’s detailed research reports.
The analysts believe that certain challenges impacting Boise Cascade’s performance in the first quarter of 2025 are temporary and anticipate a stronger performance for the remainder of the year. They emphasized that, despite the recent price target reduction, the stock continues to trade at a relatively low multiple of 5.5x to 6.5x estimated earnings for 2025 and 2026. Additionally, they noted the company’s net cash balance of approximately $7 per share as a positive factor.
Boise Cascade’s stock valuation reflects the analysts’ expectations that the current issues affecting the company’s performance will resolve, leading to improved results later in the year. The firm’s decision to maintain a Buy rating indicates their confidence in the company’s potential for recovery and growth despite the near-term headwinds. The new price target of $125.00 represents DA Davidson’s adjusted expectations for Boise Cascade’s future financial performance.
In other recent news, Boise Cascade reported its fourth-quarter 2024 earnings, revealing earnings per share (EPS) of $1.78, which slightly exceeded the forecast of $1.77. The company’s revenue for the quarter matched expectations at $1.6 billion. Despite meeting these forecasts, the company experienced a decline in sales across its divisions, with a 7% decrease in the Wood Products division and a 4% drop in the Building Materials Distribution (BMD) division. Boise Cascade’s full-year net income was reported at $376.4 million, translating to $9.57 per diluted share. Analysts from firms such as Truist Securities and D.A. Davidson have shown interest in Boise Cascade’s strategic focus, particularly on engineered wood products and distribution network expansion. The company has also projected U.S. housing starts to remain flat in 2025, which may impact market dynamics. Additionally, Boise Cascade continues to invest heavily in capital expenditures, with plans for significant modernization projects at its facilities.
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