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Investing.com - DA Davidson raised its price target on Wabash National (NYSE:WNC) to $9.50 from $7.50 on Monday, while maintaining a Neutral rating on the stock amid ongoing challenges in the trailer industry. Currently trading at $10.63, WNC sits between analysts’ target range of $9.50 to $16.00, with InvestingPro data showing the stock is fairly valued based on its proprietary Fair Value model.
The price target increase reflects a higher market multiple rather than improved fundamentals, as DA Davidson expressed continued caution about the trailer manufacturer’s outlook. This caution appears warranted, with InvestingPro data revealing a significant 25.4% revenue decline in the last twelve months and an overall Financial Health score of "FAIR."
ACT Research’s May U.S. trailer industry data showed orders increased 12% year-over-year, but this growth came off what the firm described as "near-historic lows" from the previous year. The overall picture remains challenging, with backlogs down 26% and shipments declining 29% compared to the same period last year.
The research firm noted that the trailer market outlook continues to deteriorate as fleet profitability faces challenges and uncertainty persists around tax policies, interest rates, and regulatory changes.
DA Davidson also highlighted that recent military activity in Iran could potentially raise fuel prices over time, adding another potential headwind for the trailer industry.
In other recent news, Wabash National Corporation has experienced several notable developments. S&P Global Ratings downgraded Wabash’s credit rating to ’B+’ from ’BB-’ due to higher leverage and weaker cash flows linked to declining trailer deliveries. This downgrade reflects challenges in meeting expected credit measures for 2025, although some improvement is anticipated by 2026. Similarly, Moody’s Ratings lowered Wabash’s corporate family rating to B1 from Ba3, citing a significant decrease in expected earnings for 2025 due to a down cycle in trailer production and the impact of US tariffs. The outlook has been revised to negative, with expectations of increased financial leverage.
DA Davidson has maintained a Neutral rating on Wabash, raising the price target to $9.50 from $7.50, influenced by a slight increase in market multiples. However, the firm noted significant risks, with freight markets searching for stability and low visibility. Additionally, Wabash declared a regular quarterly dividend of $0.08 per share, payable on July 24, reflecting its commitment to shareholder value. The company is also appealing a lawsuit where punitive damages were reduced to $108 million from $450 million, with resolution timing uncertain. These developments highlight the ongoing challenges and strategic decisions facing Wabash National Corporation amid a cautious economic landscape.
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