Loop Capital cuts JELD-WEN stock target to $8, maintains Hold

Published 19/02/2025, 14:02
Loop Capital cuts JELD-WEN stock target to $8, maintains Hold

On Wednesday, Loop Capital Markets adjusted its price target for JELD-WEN Holding Inc. (NYSE:JELD), a leading manufacturer of building products, to $8.00, down from the previous $10.00, while reaffirming a Hold rating on the company’s shares. The revision follows JELD-WEN’s release of its full-year 2025 guidance, which did not meet market expectations, primarily due to persistent demand challenges. The stock, currently trading at $6.74, has fallen nearly 25% in the past week alone, according to InvestingPro data.

JELD-WEN’s financial performance for the past quarter was consistent with projections, despite a difficult market for large ticket renovation and remodeling (R&R) and a shift toward more basic products in North America. However, the company’s stock experienced a sharp decline of over 20% following the announcement of its adjusted EBITDA guidance for fiscal year 2025. The guidance, which forecasts $215 million to $265 million, falls short of the consensus estimates, particularly at the midpoint.

The company’s guidance also indicates a core revenue decrease of 4-9% year-over-year, excluding the effects of the Towanda divestiture. This decline is attributed to ongoing volume and mix headwinds in both North American and European markets, despite a stable price and cost environment. For the first quarter of 2025, JELD-WEN’s guidance was significantly below prior projections, further impacted by the challenges in end markets, the negative effects of last year’s market share losses, and the Towanda divestiture.

Despite the obstacles presented by another year of difficult demand conditions, JELD-WEN remains dedicated to its strategic transformation. The company plans to continue investing in service level improvements to regain lost market share, accelerate automation, and further optimize its manufacturing footprint. These initiatives are expected to yield an incremental margin of 25-30% when volumes eventually rebound. According to InvestingPro analysis, while the company faces current challenges, analysts anticipate profitability in 2025. For deeper insights into JELD-WEN’s financial health and extensive analysis, including 18 additional ProTips and comprehensive valuation metrics, consider accessing the full Pro Research Report available on InvestingPro.

In other recent news, JELD-WEN Holding, Inc. reported disappointing fourth-quarter earnings, with a net loss of $68.4 million, or ($0.81) per share, compared to a $22.6 million loss in the same quarter last year. Revenue for the quarter was $895.7 million, surpassing the consensus estimate of $859.65 million, but still reflecting a 12.3% decline from the previous year. The company has introduced guidance for 2025, projecting revenues between $3.2 billion and $3.4 billion, below the consensus of $3.431 billion. In terms of analyst activity, Loop Capital Markets reduced JELD-WEN’s price target to $10, maintaining a Hold rating, while RBC Capital Markets lowered its target to $8, retaining an Underperform rating. Both adjustments follow the sale of JELD-WEN’s Towanda facility, which is expected to decrease annual revenues by $150 million to $200 million. The company also announced a 2025 Management Incentive Plan aimed at aligning executive interests with shareholders through performance-based incentives. Additionally, JELD-WEN disclosed the departure of Kevin Lilly, Executive Vice President of Global Transformation, who will receive severance and stock benefits as part of his exit agreement. These developments highlight ongoing strategic shifts and challenges faced by JELD-WEN in the current economic environment.

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