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On Wednesday, RBC Capital Markets adjusted its outlook on Atkore International Group Inc . (NYSE: NYSE:ATKR), reducing the company’s price target from $91.00 to $73.00 while maintaining a Sector Perform rating. This decision followed Atkore’s first-quarter fiscal year 2025 report, which revealed operating results that aligned with expectations, including consistent volume and pricing. According to InvestingPro data, the company maintains strong fundamentals with a healthy current ratio of 3.03 and trades at an attractive P/E ratio of 6.16, suggesting potential value despite recent challenges.
Atkore’s stock experienced a significant drop of approximately 20% in response to a substantial reduction in the company’s financial guidance for fiscal year 2025. This marks the fourth consecutive quarter where the company has had to lower its annual guidance. RBC Capital’s analyst attributed this guidance cut, which was by 25%, primarily to increased competition from imported products, which has led to pricing pressures. Specifically, a surge in PVC conduit imports accounted for 75% of the guidance reduction, while the remaining 25% was due to Mexican steel dumping. InvestingPro analysis reveals two key insights: the stock is currently in oversold territory based on RSI, and the company maintains strong liquidity with assets exceeding short-term obligations. Additional valuable insights are available through InvestingPro’s comprehensive research report.
The analyst pointed out that the ongoing issues are not related to the company’s execution but rather to Atkore’s exposure to market forces, as evidenced by the company’s limited visibility into future business cycles. Atkore’s backlog only extends for two weeks, which makes it difficult to predict and stabilize future earnings. The analyst expressed concern over the current situation, suggesting uncertainty as to whether the revised guidance has fully accounted for all potential setbacks, using the phrase "kitchen-sinked" to describe the thoroughness of the adjustments. Based on InvestingPro’s Fair Value analysis, the stock appears undervalued at current levels, with an Altman Z-Score of 4.11 indicating strong financial health despite market pressures.
In other recent news, Atkore has been a focal point of several financial adjustments and company developments. KeyBanc Capital Markets revised its price target for Atkore to $80 from $105, maintaining an Overweight rating. This adjustment followed Atkore’s Q1 earnings for fiscal year 2025, which revealed a decrease in net sales by 17.1% from the previous year, and a lower profit forecast for 2025. RBC Capital Markets also chimed in, raising its price target on Atkore to $102, while maintaining a "Sector Perform" rating.
Atkore’s annual meeting saw shareholders elect nine directors and approve executive compensation. They also ratified the appointment of Deloitte & Touche LLP as Atkore’s independent registered public accounting firm for fiscal year 2025.
In a report from RBC Capital Markets, Atkore was listed among companies facing challenges, due to increased competition in the electrical steel conduit market. Despite these challenges, RBC Capital still sees a 9% potential upside for Atkore shares. These are among the latest developments in the company’s journey.
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