How are energy investors positioned?
On Tuesday, DA Davidson reaffirmed its Buy rating on WD-40 Company (NASDAQ:WDFC), maintaining a price target of $322.00. The firm's analyst, Linda Bolton Weiser, highlighted the company's first-quarter fiscal year 2025 performance, which surpassed consensus expectations. WD-40 reported a 9% increase in sales, exceeding the Street's 5% projection, and earnings per share (EPS) of $1.39, which was $0.13 higher than anticipated. This success came despite higher selling, general, and administrative (SG&A) expenses due to a customer bankruptcy.
The company has confirmed its financial guidance for the full fiscal year 2025, projecting a pro forma sales growth of between 6% and 11%. DA Davidson has included the Household Cleaning business in its forecast for the second quarter of fiscal year 2025, which is expected to contribute an additional $0.08 to the firm's estimated full-year EPS.
Furthermore, the analyst has decided to carry over $0.05 of the $0.13 EPS beat into the full-year projections. InvestingPro analysis reveals the company operates with moderate debt levels and maintains strong liquidity, with current assets exceeding short-term obligations by 2.44x.
As a result, DA Davidson has increased its pro forma sales growth estimate for fiscal year 2025 to 8.5%, up from 8.0%, and raised its EPS forecast to $5.38 from $5.33. The price target of $322 is based on a 53x multiple of the firm's calendar year 2026 estimated EPS of $6.07, which remains unchanged.
WD-40's strong quarterly performance and the steady guidance for the upcoming fiscal year reflect the company's resilience and potential for continued growth. The analyst's decision to maintain the Buy rating and price target suggests confidence in WD-40's strategic direction and market position.
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