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On Tuesday, Truist Securities adjusted its outlook on Patrick Industries (NASDAQ:PATK), reducing the price target from $110.00 to $105.00. Despite this change, the firm maintains a Buy rating for the stock and has named Patrick Industries as one of its top R&L picks for 2025.
Analysts at Truist anticipate a rebound in production volumes and gains in market share within the recreational portfolio to fuel organic revenue growth. They project this growth to be in the high-single to low-double digit percentage range year-over-year, building upon the company's modest 0.33% revenue growth in the last twelve months.
The firm also foresees potential for margin improvement as production in the marine and powersports sectors stabilizes and as the company benefits from structural cost enhancements. Current gross margins stand at 22.67%, with a healthy current ratio of 2.41 indicating strong operational efficiency.
For the year 2025, Truist estimates that Patrick Industries could achieve record gross profit margins (GPM%) between 23.5% and 24.0%, which surpasses the consensus estimate of approximately 23%. The analysts believe that Patrick Industries is well-positioned to benefit from a more favorable mergers and acquisitions (M&A) climate. They estimate that the company could add upwards of $100 million in annualized EBITDA through strategic acquisitions over the next 18 months.
In other recent news, Patrick Industries has seen significant developments in its financial performance and strategic acquisitions. The company reported a 6% increase in third-quarter 2024 revenue, reaching approximately $919 million, and a 3% rise in net income to $41 million. Adjusted EBITDA also saw a 7% boost, reaching $121 million. BofA Securities adjusted its outlook on Patrick Industries, increasing the price target on the company's stock to $110.00, while maintaining an Underperform rating.
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