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Investing.com - Wells Fargo lowered its price target on Core & Main Inc. (NYSE:CNM) to $58.00 from $70.00 on Wednesday while maintaining an Overweight rating on the stock.
The firm cited Core & Main’s updated fiscal year 2025 outlook, which now projects revenues of $7.6-7.7 billion, slightly narrowed from the previous $7.6-7.8 billion range, and EBITDA of $920-940 million, down from the prior $950 million-$1 billion target.
Wells Fargo noted that Core & Main expects flat gross margin percentage compared to Q2, implying 26.8% through year-end, with SG&A deleverage more pronounced in Q3 versus Q4 as cost reduction measures begin to benefit the income statement.
The analyst lowered fiscal year 2025/2026 earnings estimates by 3 cents and 25 cents to $2.35 and $2.55 respectively, with the new price target based on a 23x price-to-earnings multiple, representing a smaller premium compared to historical levels.
Wells Fargo also indicated potential negative implications for Ferguson (NYSE:FERG), noting Core & Main has greater exposure to new residential lots at approximately 20% versus Ferguson’s 4-5%, though Ferguson initiated cost-cutting measures earlier than Core & Main.
In other recent news, Core & Main Inc. reported its Q2 2025 earnings, revealing that both earnings per share (EPS) and revenue fell short of expectations. The company posted an EPS of $0.70, missing the anticipated $0.79, and generated $2.09 billion in revenue, which did not meet the $2.12 billion forecast. Wolfe Research has adjusted its price target for Core & Main to $67, down from $75, while maintaining an Outperform rating. Analyst Nigel Coe cited concerns over the company’s revised guidance and administrative efficiency for the adjustment. Meanwhile, RBC Capital also lowered its price target for Core & Main to $62 from $67, maintaining an Outperform rating as well. RBC Capital pointed to residential market weakness and increased selling, general, and administrative expenses as factors influencing their decision. These developments reflect recent analyst evaluations and financial performance for Core & Main.
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