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On Friday, Telsey Advisory Group increased its price target for Westrock (NYSE:WRK) Coffee Co. (NASDAQ: WEST) shares to $10.00, up from the previous target of $9.00, while reiterating an Outperform rating. Currently trading at $6.15, the stock shows significant upside potential to the target price. The adjustment followed Westrock Coffee’s first-quarter results for 2025, which surpassed expectations. According to InvestingPro data, the company generated revenue of $872.02M in the last twelve months. The firm’s analysts remain optimistic about the company’s growth trajectory, particularly highlighting the potential sales and EBITDA growth driven by the operationalization of its Conway, Arkansas facility.
The analysts at Telsey underscored the company’s positioning to benefit from the increasing consumer preference for cold brew and ready-to-drink (RTD) products. They pointed out that Westrock Coffee’s expansion plans to increase manufacturing capacity for Flavor Extracts & Ingredients (FE&I) and RTD products in 2025 and beyond are crucial to its growth strategy. Westrock Coffee’s commitment to product innovation, customer relations, international market expansion, and strategic acquisitions were also noted as key growth drivers.
The Telsey team further emphasized that Westrock Coffee’s role as a production partner is becoming increasingly valuable, as global beverage brands tend to prefer an asset-light model. This strategic positioning is expected to contribute significantly to Westrock’s growth.
The new price target of $10.00 is based on a projected enterprise value to adjusted EBITDA (EV/EBITDA) multiple of approximately 10 times the firm’s anticipated 2026 adjusted EBITDA of $130 million. With a current gross profit margin of 16.69% and analysts unanimously rating the stock a Strong Buy, Telsey’s analysts maintained their positive outlook for Westrock Coffee, expressing confidence in the company’s multi-year sales and profit growth potential. Get detailed insights and Fair Value analysis for WEST and 1,400+ other stocks with an InvestingPro subscription.
In other recent news, Westrock Coffee Company reported an 11.1% increase in net sales for Q1 2025, despite a net loss of $27.2 million. The company continues to expand its manufacturing capabilities, notably with new facilities in Conway, Arkansas. These developments are part of Westrock Coffee’s strategy to enhance its product offerings and increase capacity in single-serve and ready-to-drink beverage markets. The firm reaffirmed its full-year 2025 guidance, expecting a 35% increase in adjusted EBITDA. Analysts from Telsey Advisory Group and Stifel expressed interest in the company’s capacity expansion plans and customer demand visibility. Westrock Coffee’s management confirmed strong customer demand and order visibility, emphasizing successful cross-selling efforts and customer acquisition strategies. The company faces challenges, including coffee price volatility and potential tariffs, but remains confident in its growth trajectory.
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