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On Wednesday, Jefferies revised its outlook on TPI Composites (NASDAQ:TPIC), a manufacturer of composite wind blades, by reducing the stock's price target. The new price target has been set at $2.30, a decrease from the previous $4.30, while the firm maintained its Hold rating on the stock.
The adjustment follows a review of the company's profitability trajectory, particularly in light of its fiscal year 2024 EBITDA miss and upcoming challenges. Jefferies has revised its EBITDA forecasts for 2025 and 2026 downward by 32% and 27%, respectively, to account for increased macroeconomic uncertainty.
The firm anticipates that TPI Composites will face a mixed execution performance due to difficult economic conditions, potential tariffs, and competition from Chinese manufacturers. These factors are expected to influence the company's market share.
Despite these challenges, Jefferies has chosen to maintain a Hold rating on the stock. The decision suggests a cautious approach while monitoring for signs of a sustained EBITDA recovery. The analysts expect the stock to continue experiencing volatility in the near term.
In their commentary, Jefferies stated, "We've stepped back and reassessed TPIC's profitability path given FY24's EBITDA miss and headwinds ahead. We lower our PT to $2.30 and '25 / '26 EBITDA forecasts by 32% / 27% to reflect greater macro uncertainty. We expect mixed results on execution as mgmt is dealt with tough economics, potential tariffs and share loss to Chinese players. We maintain our Hold, and expect the stock to see continued volatility, as we await evidence of sustained EBITDA recovery."
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