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Investing.com - TD Cowen has downgraded TPI Composites (NASDAQ:TPIC) from Buy to Hold and lowered its price target to $1.00 from $2.00, citing mounting policy risks and capital structure concerns. According to InvestingPro data, the company’s stock has declined over 51% year-to-date, with a concerning Financial Health Score of 1.29, rated as ’Weak’.
The downgrade reflects peer group compression and worries about the company’s heavy debt load, with TD Cowen noting that TPI Composites lacks a clear deleveraging plan that would support potential upside. InvestingPro data reveals total debt of $736.21 million and a concerning current ratio of 0.88, indicating short-term obligations exceed liquid assets.
TD Cowen highlighted that the Offshore, Backup Bipartisan Budget (OBBB) will sunset Production Tax Credits ( PTC (NASDAQ:PTC)) and 45X credits after 2027, creating what the firm describes as a "demand cliff" for the wind blade manufacturer.
The firm acknowledged that TPI Composites has secured its production volumes through 2025, providing some near-term stability for the business.
TD Cowen’s new $1.00 price target is derived using approximately 4x the firm’s 2026 EBITDA estimate for TPI Composites.
In other recent news, TPI Composites reported a larger-than-expected net loss for the first quarter of 2025, with a loss of $1.01 per share, compared to the $0.48 loss per share that analysts had forecasted. Despite this, the company achieved a revenue of $336.2 million, surpassing expectations of $322.12 million and marking a 14.3% increase year-over-year. This revenue growth was attributed to higher average sales prices and a 4% increase in wind blade production volume. However, TPI Composites faced challenges due to increased labor costs in Turkey and Mexico, as well as higher pre-existing warranty charges.
The company maintained its full-year 2025 revenue guidance of $1.4 billion to $1.5 billion, aligning with analyst estimates of $1.42 billion. However, TPI adjusted its EBITDA margin outlook to 0-2% from a previous range of 2-4%. In addition to these financial updates, TPI Composites announced that its board of directors has initiated a strategic review of the business to explore potential alternatives and optimize its capital structure. These developments provide a comprehensive view of the company’s current financial and strategic positioning.
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