Stifel raises Mativ stock rating, cuts price target to $10

On Monday, Mativ Holdings Inc. (NYSE: MATV) received an upgrade in stock rating from Stifel analysts, moving from Hold to Buy, despite a reduction in the price target to $10.00 from the previous $15.50. According to InvestingPro data, the stock currently trades at $6.09, suggesting potential upside based on analyst targets and the platform’s Fair Value assessment. Stifel’s assessment indicates a belief that the significant decline in Mativ’s share price over the last six months has been an overreaction to the company’s earnings and cash flow performance, as well as delays in reducing leverage.

Mativ Holdings Inc.’s shares have plummeted by 65% in the past six months, primarily due to weaker-than-expected earnings and cash flow, alongside a delay in leverage reduction. This downward trend has resulted in the company’s enterprise value to EBITDA (EV/EBITDA) discount compared to its peers expanding from approximately 20% to over 50%. Despite these challenges, InvestingPro analysis reveals the company maintains a significant 6.57% dividend yield and has sustained dividend payments for 30 consecutive years, demonstrating long-term financial commitment to shareholders.

Stifel analysts suggest that the market’s response to Mativ’s financial challenges has been excessive. They see potential for earnings to begin improving in the third quarter of 2025 and anticipate the company’s ability to reduce debt will return within the year. The analysts expect that Mativ’s strong cost control measures and the resolution of issues with advanced films will support margin resilience. Supporting this view, InvestingPro indicates the company trades at a modest 0.39 Price/Book ratio and maintains a healthy current ratio of 2.4, suggesting adequate liquidity to meet near-term obligations.

The firm highlights that despite a difficult start to the year 2025, there is an expectation of incremental cash flow generation and debt repayment. These factors are projected to lay the groundwork for a higher intrinsic valuation of Mativ Holdings Inc. in the future. The price target adjustment to $10.00 reflects Stifel’s revised expectations for the company’s financial performance and market position. For deeper insights into Mativ’s valuation and financial health metrics, investors can access the comprehensive Pro Research Report available exclusively on InvestingPro, which covers over 1,400 US stocks with expert analysis and actionable intelligence.

In other recent news, Mativ Holdings, Inc. reported its fourth-quarter 2024 earnings, revealing a mixed performance. The company exceeded earnings per share (EPS) expectations with an actual EPS of $0.05, surpassing the forecast of $0.02. However, Mativ fell short on revenue, reporting $458.6 million against a forecast of $470.55 million. Additionally, the company experienced a 10% decline in adjusted EBITDA year-over-year. In a significant leadership change, Mativ appointed Shruti Singhal as the new President and CEO, succeeding Julie Schertell. Singhal, who has extensive experience in business transformations, aims to enhance profitability and growth. Furthermore, Mativ has implemented measures to reduce non-operating costs by over $20 million in 2024 and is conducting a comprehensive review of its cost structure. These recent developments reflect Mativ’s strategic focus on operational excellence and financial performance.

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