On Thursday, Loop Capital Markets adjusted its financial outlook for JELD-WEN Holding Inc. (NYSE:JELD), reducing the price target from $12.00 to $10.00 while keeping a Hold rating on the stock. The revision comes in the wake of JELD-WEN’s recent divestiture announcement. According to InvestingPro data, JELD-WEN’s stock has experienced significant volatility, with the price falling over 40% in the past six months despite a recent 17% YTD recovery.
JELD-WEN confirmed the completion of its Towanda, PA manufacturing facility sale to Woodgrain Inc. for $115 million, a transaction that officially closed on January 17, 2025. This sale concludes a prolonged legal battle, initiated by an antitrust lawsuit from competitor Steves & Sons in 2016, which ultimately mandated the divestiture of JELD-WEN’s Towanda door and doorskin operations.
The company has indicated that shedding the Towanda operations is expected to decrease annual revenues by $150 million to $200 million and annual EBITDA by $25 million to $50 million over the next twelve months. These projections have led Loop Capital to reassess JELD-WEN’s financial model post-divestiture.
Loop Capital’s analyst highlighted the strategic shift JELD-WEN is undertaking, as it aims to start the 2025 calendar year with a fresh perspective and focuses on its ongoing strategic transformation. This shift comes at a time when JELD-WEN anticipates another challenging year ahead for its businesses in both North America and Europe.
The new price target of $10.00 is based on a 7x multiple of the firm’s reduced fiscal year 2025 estimated adjusted EBITDA of $258 million. Despite the lowered estimates, Loop Capital’s stance remains a Hold rating, suggesting a neutral outlook on the stock’s potential movement.
In other recent news, JELD-WEN Holding, Inc. reported a 13% year-over-year decrease in third-quarter revenue, falling to $935 million, and a drop in adjusted EBITDA to $82 million. The company has sold its Towanda facility to Woodgrain Inc. for approximately $115 million, a move expected to reduce JELD-WEN’s annual revenue by $150 million to $200 million and EBITDA by $25 million to $50 million in the year following the transaction’s completion. Analysts at Loop Capital and RBC Capital have responded to these developments by reducing their price targets for JELD-WEN, with RBC Capital maintaining an Underperform rating and Loop Capital maintaining a Hold rating on the stock. Additionally, the company announced the departure of Kevin Lilly, Executive Vice President of Global Transformation, who will receive separation payments and maintain the rights to continued vesting of restricted stock units, performance share units, and stock options. These are among the recent developments at JELD-WEN.
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