On Monday, DA Davidson revised its stock price target for Wabash National (NYSE:WNC), a leading producer of semi-trailers and liquid transportation systems, reducing it to $18.00 from the previous $23.00. Despite this adjustment, the firm has chosen to maintain a Neutral rating on the stock.
The reduction in price target comes in the wake of a substantial $462 million product-liability award announced last Friday. The award has led DA Davidson to include Wabash National on its STAMPEDE list, which tracks stocks affected by significant events. The company is expected to challenge the award or seek alternative solutions to mitigate or nullify the penalty, though the outcome remains uncertain.
The new price target of $18 is based on approximately seven times the estimated next-twelve-month enterprise value to EBITDA (earnings before interest, taxes, depreciation, and amortization) for Wabash National. DA Davidson's latest STAMPEDE report, released today, provides further details regarding their analysis and the reasons behind the inclusion of Wabash National on the list.
The legal risks facing Wabash National have prompted this reassessment by the analysts, indicating a cautious outlook on the company's financial performance in the near term. The move by DA Davidson underscores the potential financial impact such legal challenges can pose to companies, even as they navigate through the appeals process or explore other legal avenues.
In other recent news, Wabash National Corporation is considering legal action following a St. Louis jury verdict ordering the company to pay $462 million in damages related to a 2019 motor vehicle accident. The company continues to stand by the safety of its products and is exploring all legal options, including appeals.
Meanwhile, Wabash's Q2 2024 earnings met revenue expectations and surpassed earnings per share forecasts, leading to an adjustment of its full-year 2024 guidance to a midpoint of $2.1 billion in revenue and $1.55 in EPS.
Simultaneously, Wabash declared a quarterly dividend of $0.08 per share, demonstrating its commitment to shareholder value. Amidst these developments, DA Davidson maintained a neutral stance on Wabash National, keeping the price target at $23.00, despite noting improvements at the company's new South Plant.
In addition to these financial updates, Wabash announced a series of executive leadership changes, with Mike Pettit transitioning to Senior Vice President, Chief Growth Officer, and Patrick Keslin stepping in as Senior Vice President, Chief Financial Officer. These recent developments underscore Wabash National Corporation's ongoing commitment to growth and shareholder value, even as it navigates legal challenges.
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