On Wednesday, Loop Capital adjusted its outlook for JELD-WEN (NYSE:JELD) Holding, Inc. (NYSE: JELD), a leading manufacturer of building products. The firm's analyst reduced the price target on the company's stock to $17 from $21 while maintaining a Hold rating.
This change comes in response to JELD-WEN's recent announcement of a significant decline in its full-year 2024 guidance, which was influenced by persistent headwinds in the repair and remodel (R&R) demand, coupled with expectations of higher interest rates for an extended period.
JELD-WEN reported first-quarter 2024 results that aligned with expectations, despite facing volume challenges in its North American and European segments. Following these results, the company revised its FY24 adjusted EBITDA guidance downwards to $340 million to $380 million from the previously estimated range of $370 million to $420 million. This revision is attributed to lower core revenue forecasts due to sharper-than-expected volume decreases in North America and Europe.
The company now anticipates a mid-single to high-single-digit percentage decline in North American R&R volumes, adjusted from the prior low-single to mid-single-digit projection. JELD-WEN also noted delayed seasonal trends into the second quarter of 2024, with retail channel restocking being postponed due to a weakened demand for large ticket remodeling projects.
Despite these challenges, Loop Capital acknowledges JELD-WEN's ongoing strategic transformation, which includes cost reduction and productivity enhancements. Still, the firm's stance remains cautious with a Hold rating until a positive shift occurs in the sluggish R&R demand environment. The revised $17 price target is based on a 6 times multiple of the firm's new FY25 estimated EBITDA of $400 million.
InvestingPro Insights
As JELD-WEN Holding, Inc. (NYSE: JELD) navigates through a challenging period marked by a downward revision in its full-year 2024 guidance, real-time data and insights from InvestingPro can provide investors with additional context.
According to InvestingPro, analysts are expecting an increase in net income for JELD-WEN this year, providing a glimmer of hope despite recent setbacks. Moreover, the company's stock is currently in oversold territory based on the Relative Strength Index (RSI), suggesting potential for a rebound.
InvestingPro Data reveals a market capitalization of $1.23 billion and a rather high negative P/E ratio of -149.10, reflecting investor concerns about profitability. Still, with a price-to-book ratio of 1.52 as of the last twelve months leading up to Q1 2024, the stock could be considered by some investors as potentially undervalued relative to its assets. Moreover, the company's stock has experienced significant volatility, with a one-week price total return of -28.23% and a one-month return of -31.88%.
For those considering a deeper dive into JELD-WEN's financials and stock performance, InvestingPro offers additional insights. There are 10 more InvestingPro Tips available for JELD-WEN, which could be particularly useful for investors looking to make informed decisions. To access these insights and for more detailed analysis, readers can use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro.
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