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On Thursday, Canaccord Genuity adjusted its price target on Worthington Industries (NYSE:WOR) stock, increasing it to $54 from the previous $49, while sustaining a Hold rating on the shares. The revision follows Worthington’s report of its third fiscal quarter results for 2025, which the firm delivered after the market closed on Wednesday. According to InvestingPro data, the company’s market capitalization stands at $2.58 billion, with a solid financial health score rated as ’FAIR’. Worthington Industries showcased a robust performance in what marked its fifth consecutive quarter of reporting without the now-separated steel business.
The company’s sales dipped by 4% to $304.5 million, which still surpassed Canaccord Genuity’s estimate (CGe) by approximately 4% and the consensus estimate by about 5%. When accounting for the deconsolidation of the former Sustainable Energy Solutions (SES) segment and the addition of the Ragasco business acquired in the first quarter of 2025, organic sales actually saw an increase of 4%. The company maintains a healthy financial position with a current ratio of 3.51 and operates with a moderate debt-to-equity ratio of 0.34. Moreover, Worthington’s gross margin of 26.4% exceeded consensus expectations, leading to significant outperformance on adjusted EBITDA and EPS, beating them by roughly 13% and 30%, respectively.
Despite the impressive financial outcomes and the excitement over new distribution gains, Canaccord Genuity noted that the surge in Worthington’s stock price, which climbed 24% compared to the Russell 2000’s 1% decline, might be overly enthusiastic. InvestingPro analysis indicates the stock is currently trading above its Fair Value, with technical indicators suggesting overbought conditions. The analyst highlighted that the favorable quarter was somewhat expected due to the company’s known insulation from tariffs and that the results from recent product launches are still pending. Notably, the company has maintained dividend payments for 53 consecutive years, demonstrating long-term financial stability.
Canaccord Genuity reiterated its Hold rating but increased the price target to $54, driven by raised estimates. The firm acknowledged that while it’s premature to declare a trend, there is a growing optimism. The cooperation of market conditions combined with Worthington’s internal cost and margin initiatives could potentially drive a strong earnings narrative in the coming years. For deeper insights into Worthington’s valuation metrics and growth potential, investors can access comprehensive analysis through InvestingPro, which offers exclusive access to over 16 additional ProTips and detailed financial metrics.
In other recent news, Worthington Industries reported impressive financial results for the third quarter of fiscal year 2025, surpassing analyst expectations. The company achieved an adjusted earnings per share (EPS) of $0.91, significantly higher than the projected $0.70. Revenue also exceeded forecasts, reaching $304.5 million compared to the anticipated $289.09 million. These strong results reflect the company’s effective operational execution and strategic initiatives. Additionally, Worthington Industries continues to focus on mergers and acquisitions as part of its long-term growth strategy. Analyst firms have taken note of these developments, with some providing positive feedback on the company’s future prospects. The company has also launched new products and expanded its distribution channels, indicating ongoing efforts to drive growth. These recent developments underscore Worthington Industries’ commitment to enhancing shareholder value through strategic initiatives and financial performance.
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