Stifel maintains Buy on Westrock Coffee, reiterates $12 target

Published 12/03/2025, 15:10
Stifel maintains Buy on Westrock Coffee, reiterates $12 target

On Wednesday, Stifel analysts held steady on their optimistic outlook for Westrock (NYSE:WRK) Coffee Co. (NASDAQ: WEST), maintaining a Buy rating and a $12.00 price target for the company’s stock. The reaffirmation follows Westrock Coffee’s announcement of its fourth quarter earnings, which revealed an EBITDA of $13.3 million. This figure fell short of Stifel’s estimate by $3.3 million, largely due to increased costs associated with scaling up operations at its Conway facility. According to InvestingPro data, the company carries a substantial debt burden of $581 million, though maintains a healthy current ratio of 1.39, indicating adequate liquidity to meet short-term obligations.

Westrock Coffee also adjusted its 2025 guidance, now forecasting EBITDA in the range of $60-$73 million, which includes $15 million of scale-up costs. Despite this change, Stifel views the year 2025 as a period of transition for Westrock Coffee, anticipating an incremental improvement in EBITDA, while acknowledging the financial impact of ongoing scale-up expenses. InvestingPro analysis reveals the company is quickly burning through cash, with negative free cash flow of $189.5 million in the last twelve months. However, analysts expect the company to achieve profitability this year, with positive EPS forecasts for 2024.

The company’s shares are currently trading around 8.5 times enterprise value to EBITDA (EV/EBITDA), a valuation that Stifel analysts believe does not fully account for the substantial EBITDA growth projected over the next two years. The analysts’ continued endorsement of a Buy rating and a $12 target price reflects their confidence in Westrock Coffee’s growth trajectory despite the near-term costs of facility expansion. Based on InvestingPro’s Fair Value analysis, the stock appears to be overvalued at current levels, with additional financial insights and 8 more ProTips available to subscribers.

In other recent news, Westrock Coffee Company reported its Q4 2024 earnings, highlighting significant growth in its Beverage Solutions segment, which saw a 29% increase in adjusted EBITDA. Despite a 6.5% rise in net sales and a 9.2% increase in gross profit, the company did not meet earnings per share and revenue forecasts. This shortfall led to a cautious investor response. The company’s full-year consolidated adjusted EBITDA reached $47.2 million, with the Beverage Solutions segment contributing $53.6 million. Analysts from Surplus Securities noted the company’s challenges with fluctuating coffee prices and potential supply chain disruptions. Westrock Coffee has projected a consolidated adjusted EBITDA of $66.5 million for 2025, anticipating 35% year-over-year growth. The company continues to expand its capabilities, completing automation of new packaging lines and launching innovative product lines at its Conway facility. Looking ahead, Westrock Coffee expects a 72% growth in 2026, aiming to reduce its Beverage Solutions net secured leverage ratio to 3x by the end of that year.

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