Stock market today: S&P 500 drops for fifth day as focus shifts to Powell’s speech
On Monday, Stifel analysts, led by Nathan Jones, adjusted their price target on Valmont Industries (NYSE:VMI) stock to $343 from the previous $425, while reiterating a Buy rating. The revision comes amid concerns about a potential global trade war and the likelihood of an industrial recession in the second half of 2025. According to InvestingPro data, Valmont, currently trading at $283.51, appears undervalued based on its Fair Value analysis. The company boasts a strong financial health score and has maintained dividend payments for 47 consecutive years.
Jones remarked on the current economic landscape, noting the limited relevance of their survey in the face of looming massive tariffs that could affect the entire global economy. He indicated that the survey aimed to establish a baseline for expectations ahead of the U.S. Administration’s tariff announcement, with plans to repeat the survey at the end of the month to gauge changes in sentiment and expectations. Despite market uncertainties, Valmont maintains a moderate debt level and strong liquidity position, with current assets exceeding short-term obligations by more than 2x.
The survey revealed a decline in dealer network sentiment, with dealers now anticipating a year-over-year (y/y) next twelve months (NTM) volume decrease of 2.1%, compared to a 0.3% decrease in the previous survey. The reported volume for the first quarter of 2025 was down by 3.3% y/y, while prices were up by 2.0% y/y. This contrasts with the last quarter’s survey, which showed a 2.1% y/y volume decrease in the first quarter of 2025.
Looking ahead, dealers expect volumes to shrink by 2.5% over the next three months and by 2.1% over the next year. In a significant shift, 58% of dealers anticipate price increases, a stark contrast to the prior quarter’s survey where no dealers expected price hikes. This change in dealer expectations reflects the growing uncertainty and challenges in the industrial sector as it braces for the impact of potential global trade disruptions. With a P/E ratio of 20.27 and analysts projecting profitability for 2025, InvestingPro has identified 8 additional key investment factors for Valmont. Access the complete analysis and comprehensive Pro Research Report, along with real-time metrics and expert insights, with an InvestingPro subscription.
In other recent news, Valmont Industries has been actively addressing the impact of U.S. tariffs on its operations. During a recent earnings call, the company outlined strategies to mitigate these effects, including pricing actions and supply chain adjustments, aimed at maintaining cost neutrality in the latter half of fiscal 2025. Valmont emphasized its resilience, noting that most of its products for U.S. customers are manufactured within its 24 domestic facilities. However, the company also acknowledged that its plans do not account for potential retaliatory tariffs or future additional U.S. tariffs.
Analysts have been adjusting their outlooks on Valmont, with William Blair downgrading the stock to Market Perform due to concerns over the tariffs’ potential impact on near-term earnings. DA Davidson also shifted its rating to Neutral, maintaining a price target of $380, despite Valmont’s strong fourth-quarter performance. Meanwhile, Stifel has maintained its Buy rating with a $425 price target, challenging competitor reports that suggested a potential guidance cut. The varied analyst ratings reflect differing views on the company’s ability to navigate tariff-related challenges and broader market uncertainties.
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