BofA warns Fed risks policy mistake with early rate cuts
On Monday, DA Davidson took a conservative approach towards Alta Equipment Group (NYSE:ALTG) by reducing the company’s price target from $9.00 to $8.00, yet reaffirming a Buy rating on the stock. Currently trading at $5.43, ALTG has shown significant volatility, with a 11.3% gain over the past week despite a 22.3% decline over six months. Stifel analysts adjusted their expectations after reviewing Alta Equipment’s first quarter results of 2025 and conducting further due diligence. They have chosen to maintain their adjusted EBITDA forecast for the year 2025, while adopting a more cautious outlook for 2026. According to InvestingPro data, the stock is currently trading near its Fair Value, with analyst targets ranging from $7 to $10.
The analysts noted that demand within the Construction Equipment (CE) sector remains stable. They also found the bookings and margins for new and used equipment in the Material Handling (MH) division to be promising. Alta Equipment has implemented several profit improvement measures that have enhanced performance, according to the analysts. These measures include capitalizing on rental opportunities with small businesses and transitioning from distributing a common stock dividend to executing stock repurchases. InvestingPro analysis reveals the company generated $1.86 billion in revenue over the last twelve months, maintaining a gross profit margin of 26.3%, though profitability remains a challenge.
Despite the positive aspects of Alta Equipment’s strategy, the analysts emphasized that balance sheet leverage is still manageable, but reducing debt should be a high priority for the company. The analysts’ commentary suggests that while there are positive indicators, there is also a need for caution, particularly with regard to the company’s financial leverage.
The updated price target reflects a more conservative stance for the company’s prospects in the following year, balancing the current performance with the potential risks ahead. The analysts’ maintained Buy rating indicates they still see value in the stock despite the adjusted price target.
In other recent news, Alta Equipment Group Inc. reported mixed financial results for the first quarter of 2025. The company’s revenue decreased by 4.2% year-over-year, totaling $423 million, while adjusted EBITDA fell by $500,000 compared to the same period last year. Despite these declines, the company noted improvements in gross margins, particularly in the service segment. Alta Equipment Group has suspended its quarterly dividend and expanded its share repurchase program by $10 million, now totaling $30 million. The company is focusing on optimizing operations by divesting non-core assets, such as its aerial equipment rental business in Illinois, which brought in $20 million in cash proceeds. Analysts from Thompson Research Group and B. Riley Securities noted the strategic adjustments and operational efficiencies Alta is implementing. The company reaffirmed its full-year 2025 adjusted EBITDA guidance, projecting between $171.5 million and $186.5 million. Alta Equipment Group remains focused on improving product support margins and exploring new opportunities in e-mobility and infrastructure development.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.