Worthington Industries (WOR) Stock Forecast & Price Target

Worthington Enterprises Inc reported a robust 19% year-over-year increase in sales, reaching $328 million, which surpassed consensus expectations by approximately 5%. The Building Products segment demonstrated particularly strong performance, with Q1 sales growth of 32%, driven by both higher volumes and contributions from the recent Elgen acquisition, contributing significantly to the company's overall revenue. Continued strength in construction and cooling products, alongside the company’s strategic efforts to modernize facilities, supports the positive outlook and positions Worthington Enterprises favorably in the market.

Worthington Enterprises Inc. faces a negative outlook primarily due to a decline in gross margins, which decreased by approximately 120 basis points year-over-year, attributed to increased headcount and internal initiatives related to Elgin. The company's Building Products segment reported a significant drop in equity earnings from $10 million to $4 million, highlighting a challenging market environment that adversely affected performance. Additionally, disappointing free cash flow figures, which fell to $27.9 million from $31.5 million in the previous year, coupled with a decline in segment adjusted EBITDA margin of 150 basis points, further underscore the financial pressures the company is currently experiencing.