On Tuesday, B.Riley adjusted its outlook on JELD-WEN (NYSE:JELD) Holding, Inc. (NYSE:JELD), a leading manufacturer of building products, by reducing the price target to $17 from the previous $20 while maintaining a Neutral rating on the stock.
This change follows the company's recent earnings call held last Monday, where JELD-WEN reported first-quarter 2024 results that fell short of both the analyst's and consensus estimates, primarily due to decreased volumes and an unfavorable product mix.
The company, during its earnings call, revised its full-year guidance downwards, citing weaker macroeconomic trends in the new multi-family unit (MFU) and repair and remodel (R&R) segments in North America, along with persistent commercial and residential market challenges in Europe.
Despite these headwinds, JELD-WEN's management emphasized their commitment to mitigating the impact through cost reduction and efficiency improvements across numerous small-scale projects.
The lowered guidance for the year 2024 includes expectations for reduced volumes in the R&R and MFU markets, which are anticipated to outweigh any positive forecasts for single-family (SF) starts. B.Riley's decision to remain neutral on JELD-WEN's stock is based on the need for more substantial signs of improvement in macro conditions or evidence that management's strategic initiatives are positively affecting the company's financial performance.
The firm's revised price target reflects the challenges faced by JELD-WEN, including the softer demand in key market segments and the ongoing efforts by the company to drive down costs and enhance operational efficiencies. B.Riley will continue to monitor JELD-WEN's progress and the broader market conditions to assess any potential changes in its investment stance.
InvestingPro Insights
In light of B.Riley's recent adjustments to JELD-WEN Holding, Inc.'s (NYSE:JELD) outlook, InvestingPro provides additional insights that could be crucial for investors. Despite the challenges highlighted in the company's earnings call, InvestingPro Tips indicate that net income is expected to grow this year, and analysts predict the company will be profitable this year. This is a positive sign for future performance, potentially balancing the recent earnings miss and downward revisions by 10 analysts for the upcoming period.
From a valuation standpoint, JELD-WEN's stock appears to be positioned for a strong free cash flow yield, according to InvestingPro Tips. This could be appealing to value-oriented investors, especially considering that the company's liquid assets exceed its short-term obligations, suggesting financial stability in covering immediate liabilities.
On the data front, JELD-WEN's market cap stands at $1.27 billion, with a P/E ratio of 65 and a more challenging adjusted P/E ratio of -46.45 for the last twelve months as of Q1 2024. The company's revenue for the same period was $4.18 billion, although it saw a decline of 8.64%. The stock's recent price movements have been volatile, with a significant drop over the last three months, reflected in a 1-month price total return of -23.49%. Yet, it's worth noting that the stock has managed a 1-year price total return of 4.66%.
For investors seeking a more in-depth analysis, InvestingPro offers a total of 10 InvestingPro Tips, which can be accessed at https://www.investing.com/pro/JELD. Use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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