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On Thursday, Truist Securities revised its price target for FTI Consulting (NYSE:FCN) stock, adjusting the figure to $225 from the previous $275. Despite this reduction, the firm maintained its Buy rating on the company’s shares. The adjustment followed FTI Consulting’s announcement of weaker than expected results for the fourth quarter and a less optimistic outlook for the year 2025. The company’s performance was affected by challenges within its Economic Consulting (EC) segment, including talent turnover, and a slower initiation of capital markets activity at the start of the year. According to InvestingPro data, FCN shares are currently trading near their 52-week low at $162.99, with analysis suggesting the stock is undervalued.
The management of FTI Consulting conveyed a restrained sentiment during their earnings call, acknowledging the market’s disappointment with the projection of only modest earnings per share (EPS) growth. This expectation is set against the backdrop of what is generally regarded as a stable growth story that is not highly dependent on economic cycles, evidenced by the company’s strong financial health score of "GREAT" on InvestingPro and impressive revenue growth of 11.66% over the last twelve months.
Truist Securities reiterated its Buy rating, expressing confidence in FTI Consulting’s ability to bounce back from the recent departures at Compass Lexecon, one of its subsidiaries. The firm’s analysts believe that FTI Consulting has the capacity to recover from these setbacks, as evidenced by its history of overcoming similar challenges in the past. InvestingPro analysis reveals several positive indicators, including strong cash flows and a solid balance sheet. Subscribers can access 8 additional ProTips and a comprehensive Pro Research Report for deeper insights into FCN’s financial health and growth potential.
The updated price target of $225 takes into account the revised estimates, which have been lowered in response to the company’s latest financial disclosures and forward-looking statements. Truist Securities’ analyst commented on the situation, stating, "Despite the disappointing outlook, we believe FCN can recover from Compass Lexecon defections consistent with past rebounds."
FTI Consulting’s recent report and the subsequent adjustment of the price target by Truist Securities reflect the current challenges faced by the company. Nevertheless, the maintained Buy rating suggests a belief in the company’s potential for recovery and future growth.
In other recent news, FTI Consulting reported fourth-quarter earnings and revenue that fell short of analyst expectations, with an earnings per share (EPS) of $1.56 compared to the forecasted $1.73. The company’s revenue for the quarter was $894.9 million, below the anticipated $932.18 million. Despite a 6% increase in full-year revenue for 2024, the company faced a challenging second half, with a 3% decrease in fourth-quarter revenue year-over-year. FTI Consulting’s guidance for 2025 also disappointed, with projected full-year EPS ranging from $7.80 to $8.60, below the consensus estimate of $8.68, and revenue expectations between $3.66 billion and $3.81 billion, falling short of the anticipated $3.903 billion. The company announced a special charge of approximately $17 million in the first quarter of 2025, related to workforce adjustments, which follows an $8.2 million charge in the fourth quarter of 2024. These measures are expected to result in cost savings of about $70 million for the full year. Analysts have noted potential challenges for FTI Consulting, particularly in its Economic Consulting segment, due to recent senior departures. The company’s leadership remains focused on growth, despite these setbacks, and anticipates continued investment in talent and innovation.
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