Core & Main (CNM – Research Report), the Industrials sector company, was revisited by a Wall Street analyst yesterday. Analyst Andrew Obin from Bank of America Securities reiterated a Sell rating on the stock and has a $40.00 price target.
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Andrew Obin has given his Sell rating due to a combination of factors impacting Core & Main’s financial outlook. Despite the company’s fourth-quarter revenue surpassing expectations, the adjusted EBITDA only met estimates, which was below market expectations considering favorable conditions such as additional selling days and good weather. Moreover, the company’s guidance for fiscal year 2025 indicates lower-than-anticipated revenue and EBITDA margin growth compared to previous projections, with revenue growth expected to be between 2-5%, down from the earlier framework of 6-8%.
Additionally, the pricing environment poses challenges, as the prices for key materials like plastic, iron, and steel pipes have been declining, potentially exerting further pressure on Core & Main’s gross margins. The company’s leadership transition, with changes in the CEO and CFO roles, adds another layer of uncertainty. These factors, combined with a price objective of $40.00 USD, which is significantly below the current trading price, underpin Obin’s decision to maintain a Sell rating on the stock.
CNM’s price has also changed moderately for the past six months – from $44.250 to $49.520, which is a 11.91% increase.