On Friday, Loop Capital Markets adjusted its outlook on shares of JELD-WEN (NYSE:JELD) Holding, Inc. (NYSE:JELD), a leading manufacturer of building products. The firm's analyst decreased the price target on the company's shares to $16.00, down from the previous target of $17.00. Despite this change, the analyst maintained a Hold rating on the stock.
The revision of the price target reflects concerns over persistent headwinds in the large ticket repair and remodel (R&R) demand. Loop Capital revised its second-quarter forecast for JELD-WEN to fall below the consensus, citing more conservative revenue and margin assumptions for North America than previously modeled. The company has faced delays in seasonal trends, with re-stocking in the retail channel being pushed back due to soft demand in the large ticket remodel sector.
JELD-WEN's performance has been affected by the higher cost of credit and a decrease in housing turnover, which has continued to challenge large ticket remodeling activity throughout the quarter. As a result, Loop Capital has adjusted its full-year 2024 EBITDA forecast for JELD-WEN to $347 million, a decrease of $18 million. This new estimate now sits at the lower end of the company's provided guidance range of $340 million to $380 million.
Despite these challenges, Loop Capital acknowledged the company's efforts in reducing costs and optimizing its manufacturing footprint, which have been part of JELD-WEN's self-help narrative. However, these initiatives have been somewhat overshadowed by the cyclical nature of the large ticket R&R demand.
Looking forward, JELD-WEN could present an opportunity for a turnaround in fiscal year 2025 if there is a recovery in R&R demand. This potential is linked to anticipated rate cuts later in the year, which could spur demand and benefit from the company's improved margin profile resulting from its ongoing business transformation.
In other recent news, JELD-WEN Holding, Inc. announced the appointment of Samantha L. Stoddard as Executive Vice President and Chief Financial Officer, effective July 1, 2024. This change in leadership follows the company's first-quarter 2024 results, which fell short of both analysts' and consensus estimates due to decreased volumes and an unfavorable product mix.
Consequently, JELD-WEN revised its full-year guidance downwards, citing weaker macroeconomic trends and persistent market challenges in North America and Europe. Analysts from B.Riley, Jefferies, and Loop Capital adjusted their outlook on JELD-WEN, reducing their price targets and maintaining a neutral or hold rating.
Despite these challenges, JELD-WEN's management remains committed to mitigating the impact through cost reduction and efficiency improvements, with over 300 cost reduction projects completed and around 700 still active. These are the recent developments concerning JELD-WEN.
InvestingPro Insights
As JELD-WEN Holding, Inc. navigates through the challenges in the remodeling and building products sector, recent data and analysis from InvestingPro provide additional context for investors. With a market capitalization of $1.38 billion and a forward-looking mindset, the company is expected to see net income growth this year, an aspect that might be appealing to investors considering the current economic headwinds.
Moreover, JELD-WEN has demonstrated a significant return over the last week with a 11.32% price total return, reflecting a degree of investor confidence in the face of Loop Capital's revised outlook.
The company's stock price movements have been quite volatile, which could indicate opportunities for agile investors. Despite not paying dividends, JELD-WEN's valuation implies a strong free cash flow yield, which could be a sign of underlying value in the company's stock. Investors looking for more comprehensive analyses can find additional InvestingPro Tips, as there are 9 tips in total for JELD-WEN on InvestingPro's platform. For those interested in gaining deeper insights, using the coupon code PRONEWS24 can provide up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.
The revised price target by Loop Capital Markets coincides with a period where JELD-WEN is showing a resilience in its stock performance over the short term. As the company looks towards profitability this year, according to analysts, the insights provided by InvestingPro could serve as valuable tools for investors making decisions in this sector.
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