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Investing.com - Morgan Stanley downgraded WillScot Holdings Corp (NASDAQ:WSC) from Overweight to Equalweight on Thursday, slashing its price target to $21.00 from $37.00.
The downgrade comes despite Morgan Stanley’s view that WillScot remains among the higher quality rental companies in its coverage universe, citing the company’s earnings and free cash flow defensiveness during the construction downturn.
Morgan Stanley projects WillScot’s EBITDA will decline only 9% year-over-year in 2025, compared to an average 28% decline for other construction companies in its coverage.
The investment bank noted that investor confidence in WillScot is "far too battered" to allow for a stock performance reversal without a clear recovery in broader macro demand, which the company indicated might not happen until the second half of 2026 at the earliest.
Morgan Stanley maintains a cautious view on U.S. non-residential construction, suggesting a recovery in construction activity is more likely a 2027 dynamic, prompting the move to the sidelines until clearer evidence of recovery emerges.
In other recent news, WillScot Mobile Mini Holdings Corp reported its third-quarter earnings, which did not meet analysts’ expectations. The company announced earnings per share (EPS) of $0.24, falling short of the projected $0.30, creating a 20% negative surprise. Revenue also missed forecasts, coming in at $567 million compared to the anticipated $582.97 million, marking a 2.74% shortfall. Following these results, Jefferies adjusted its outlook on WillScot, lowering the price target to $22 from $23 while maintaining a Hold rating. The adjustment was influenced by the earnings miss and a more significant reduction in the company’s full-year guidance than expected. WillScot’s third-quarter EBITDA was reported at $243 million, which also fell short of the $248 million consensus estimate. These developments reflect recent shifts in the company’s financial performance and analyst expectations.
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