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On Wednesday, Truist Securities adjusted its outlook on SiteOne Landscape Supply (NYSE: NYSE:SITE), reducing the price target to $145 from the previous $165 while still holding a Buy rating on the company’s stock. The revision came as SiteOne shares experienced a modest decline of 1.8% during intraday trading, slightly outperforming the S&P 500’s 1% drop.
Keith Hughes of Truist Securities noted that SiteOne’s financial results marginally surpassed Wall Street forecasts. Despite broader market challenges, the company’s management has chosen to keep its EBITDA forecast unchanged at $342.8 million. Hughes pointed out a noteworthy shift in business momentum for SiteOne, with March and April showing positive trends as weather conditions improved. This uptick contrasts with other companies in the residential sector, which have seen demand weaken in recent times. InvestingPro data shows the company maintains healthy financials with a current ratio of 2.42 and revenue growth of 5.57% in the last twelve months.
Hughes also suggested that the cessation of indirect tariff-related price increases might put an end to the deflationary pressures that have negatively impacted SiteOne’s EBITDA over the past two years. Achieving the projected EBITDA range could significantly improve investor perception of the company’s financial narrative, according to the analyst.
While the firm’s stance on SiteOne remains positive, the lowered price target reflects a cautious approach due to the ongoing macroeconomic volatility, which has been a limiting factor for the stock’s price growth. Hughes’s commentary underscores a belief in the company’s potential to recover and advance despite the current economic headwinds.
In other recent news, SiteOne Landscape Supply Inc. reported its first-quarter 2025 financial results, highlighting a mixed performance. The company reported a net sales increase of 4% year-over-year, reaching $860 million, despite a 1% decline in organic daily sales. However, SiteOne’s earnings per share (EPS) fell short of analyst expectations, posting a loss of -$0.61 compared to the forecasted -$0.44. The net loss for the quarter increased to $27.3 million from $19.3 million in the previous year. Despite these challenges, SiteOne saw a 6% rise in adjusted EBITDA, reaching $22.4 million.
SiteOne’s digital sales surged by 140%, contributing to its strategic focus on digital transformation and operational efficiency. The company also completed two acquisitions, enhancing its product line and geographic reach, which added $20 million in trailing twelve-month sales. Analysts from firms like Goldman Sachs and UBS have been attentive to SiteOne’s strategies, including its digital initiatives and acquisition efforts. The company anticipates low single-digit organic daily sales growth for the full year 2025, with an adjusted EBITDA guidance set between $400 million and $430 million. Despite the earnings miss, investor confidence appears steady, as indicated by a slight increase in the company’s stock in premarket trading.
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