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On Monday, Stifel analysts adjusted their outlook on Titan America (NYSE:TTAM), reducing the price target from $16.00 to $15.00 while maintaining a Buy rating on the stock. The revision comes in light of the company facing a significant drop in imported cement volumes due to challenging weather conditions, particularly in Florida, during the first quarter of 2025. The company, which generated $1.63 billion in revenue over the last twelve months with a healthy 26.53% gross margin, will report its next earnings on May 28. InvestingPro analysis shows analyst targets ranging from $14.10 to $19.00, suggesting potential upside despite current challenges.
According to Stifel’s analysis, Titan America’s imported cement volume saw a dramatic decrease of approximately 60-65% year-over-year in the first quarter of 2025. Despite this sharp decline, the analysts suggest that the actual sell-through of imported cement may have experienced less volatility, potentially buffered by inventory adjustments. As demand fluctuates, Titan America is expected to give preference to domestically produced cement, which might have contributed to the observed volatility in import volumes. InvestingPro data reveals the stock has fallen significantly over the last three months, though the company maintains strong profitability with $335.11M in EBITDA.
Stifel’s commentary also highlighted the potential for cement pricing to improve in the second quarter of 2025 as Titan America passes through incremental tariff costs to customers. Notably, around 35% of the company’s cement volume is imported, indicating that the net impact of tariffs on pricing and costs could be complex. Historically, Titan America has sourced over 80% of its cement from Greece, which is now subject to a 10% tariff.
The analysts further noted that rising natural gas prices could exert additional price/cost pressures on cement production. Conversely, they pointed out that lower diesel prices could serve as a tailwind for the concrete segment, potentially offsetting some of the cost increases in other areas. Despite the reduced price target, Stifel’s continued Buy rating reflects an optimistic outlook for Titan America’s stock performance moving forward. Trading at a P/E ratio of 11.57, InvestingPro analysis indicates the stock is currently fairly valued, with additional insights available in the comprehensive Pro Research Report covering this and 1,400+ other top US stocks.
In other recent news, Titan America reported its fourth-quarter 2024 financial results, with revenue reaching $390 million, surpassing the consensus estimate of $385 million. The company also reported an adjusted EBITDA of $84 million, exceeding the forecast of $79 million. Despite these strong results, Titan America faced challenges from adverse weather conditions, which are expected to continue affecting the first quarter of 2025. Looking ahead, the company anticipates mid-single-digit revenue growth and modest improvements in EBITDA margins for 2025, with a focus on infrastructure and commercial construction sectors driving future growth.
Analyst firms have adjusted their outlooks on Titan America. Stifel maintained a Buy rating but lowered the stock’s price target from $19.00 to $16.00, while Bernstein reduced the target from $17.00 to $15.00, maintaining a Market Perform rating. BofA Securities also cut the price target to $15.50, keeping a Neutral stance. These revisions reflect the company’s updated 2025 guidance, which now expects lower revenue growth and margin gains than previously forecasted.
Despite a 6% decrease in U.S. cement consumption in 2024, Titan America’s volumes only fell by 3%, attributed to its involvement in sectors like Virginia’s data center market and key infrastructure projects. The company cites a strong backlog of infrastructure projects, which is expected to support demand starting in the second quarter of 2025. Additionally, Titan America has multiple sources for cement supply, both inside and outside the European Union, to mitigate potential disruptions from tariffs, which could potentially serve as a tailwind for cement pricing.
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