On Monday, Oppenheimer adjusted its price target on WillScot (NASDAQ:WSC) Mobile Mini (NASDAQ:MINI_old) Holdings Corp. (NASDAQ:WSC) to $53, a decrease from the previous $60, while maintaining an Outperform rating on the stock.
The adjustment came after the company reported its first-quarter earnings for 2024 at the end of last week, which led to a revision of Oppenheimer's financial model.
WillScot Mobile Mini Holdings Corp. experienced a growth in total and leasing revenue by 4% and 5% year-over-year, respectively, for the first quarter of 2024. Despite a year-over-year decline in Modular and Storage volumes, the company saw rental rates increase by double digits in both asset categories.
Mid-single-digit growth in Modular activations from April to year-to-date signals a potential increase in year-over-year volume growth in the latter half of the year. However, Storage activations continued to face challenges.
The company's free cash flow (FCF) demonstrated significant strength in the first quarter, rising by 40% compared to the same period last year. WillScot also confirmed its adjusted EBITDA guidance for 2024, which remains set between $1.125 billion and $1.200 billion. The guidance takes into account the opposing trends of Modular's growth and Storage's decline.
In light of these developments, Oppenheimer has conservatively revised its 2024 adjusted EBITDA estimate for WillScot to $1.125 billion, which is a 6% increase from the previous estimate of $1.182 billion. The firm reiterated its Outperform rating and, based on a 12x EV/EBITDA multiple of its 2024 adjusted EBITDA estimate, adjusted the stock's price target accordingly.
WillScot Mobile Mini Holdings Corp. is also participating in Oppenheimer's Industrial Growth Conference today, where further insights into the company's performance and outlook may be shared.
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