Get 40% Off
💰 Ray Dalio just increased his holdings in Google by 162.61% - See the full portfolio with InvestingPro’s free Stock Ideas toolCopy Portfolios

Benchmark lowers Universal Forest Products shares target, cites mixed Q1 results

EditorEmilio Ghigini
Published 05/01/2024, 07:33 AM
UFPI
-

On Wednesday, Benchmark lowered the price target of Universal Forest Products (NASDAQ:UFPI) shares to $133 from $137. The firm maintained its Buy rating on the stock. The adjustment followed Universal Forest Products' first-quarter financial performance, which presented a combination of underwhelming revenue and stronger-than-expected earnings.

The company reported its quarterly results on Tuesday, revealing revenues that fell short of market expectations. However, Universal Forest Products managed to surpass projected earnings before interest, taxes, depreciation, and amortization (EBITDA) and earnings per share (EPS). The company faced challenges such as a competitive pricing environment and generally soft demand across all segments, which are affected by ongoing macroeconomic headwinds.

In light of the current market conditions, Universal Forest Products has moderated its outlook from the previous quarter. The company anticipates lumber prices to stabilize at lower levels, with packaging and retail demand experiencing mid-single digit declines, and construction demand remaining relatively unchanged.

Despite the earnings beat, Benchmark has revised its EPS estimates for Universal Forest Products downward, from $8.50 to $8.00 for the current year, and from $9.25 to $9.00 for the following year. These revisions reflect the anticipated continued weakness in the end markets. The firm reiterated its Buy rating but adjusted the price target to reflect these changes.

InvestingPro Insights

Universal Forest Products (NASDAQ:UFPI) has demonstrated financial resilience, as reflected in the latest metrics from InvestingPro. With a market capitalization of $6.93 billion and a P/E ratio standing at 13.89, the company shows a valuation that could attract investors looking for stable earnings at a reasonable price. The company's strong balance sheet is underscored by an adjusted P/E ratio of 14.18 for the last twelve months as of Q4 2023, showcasing a consistency in earnings.

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

Amidst recent market volatility, Universal Forest Products has maintained a robust financial position. According to InvestingPro Tips, the company holds more cash than debt, indicating a solid liquidity status that could help it navigate through uncertain economic conditions. Furthermore, with a track record of raising its dividend for 11 consecutive years and maintaining dividend payments for 32 consecutive years, UFPI presents a compelling case for income-focused investors. The company's ability to cover interest payments with cash flows adds an additional layer of security for those dividends.

InvestingPro also highlights the company's profitability, with analysts predicting UFPI will remain profitable this year. This aligns with the company's historical performance, which includes a high return over the last decade and a strong return over the last five years. For readers interested in more detailed analysis and additional InvestingPro Tips, there are 8 more tips available on UFPI at https://www.investing.com/pro/UFPI. To gain access to these insights, use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.