On Friday, TD Cowen made an adjustment to the price target of Albany International Corp . (NYSE:AIN), reducing it to $81.00 from the previous $95.00. Despite this change, the firm maintained its Buy rating on the company's stock.
The revision follows Albany International's announcement that it has lowered its calendar year 2024 sales and earnings per share (EPS) forecasts. The decrease in guidance is attributed to approximately $24 million in charges related to various programs, including the CH-53K helicopter, an unnamed Gulfstream project, and several Boeing (NYSE:BA) programs.
These charges are specifically associated with the company's Salt Lake City facility and are not related to the recent Boeing strike. The impact of these charges is significant, with a roughly 4% drop in sales and about a 17% fall in EPS guidance for the calendar year 2024. The analyst from TD Cowen noted that the new estimates for calendar year 2025 sales and EPS are approximately 2% and 14% below the current consensus, respectively.
The analyst's commentary highlighted that the consensus figures are likely to adjust and align more closely with TD Cowen's projections. This suggests that the market's expectations for Albany International's future performance may be recalibrated in light of the new information provided by the company.
Albany International's financial adjustments are confined to its Salt Lake City operations, which notably do not include the LEAP engine program. The LEAP engine is a product of CFM International, a joint venture between GE Aviation, a division of General Electric (NYSE:NYSE:GE), and Safran (EPA:SAF) Aircraft Engines.
In other recent news, Albany International Corp. has experienced several significant developments. The company reported a surge in revenue during the second quarter of 2024, largely attributed to its acquisition of Heimbach. The Engineered Composites segment secured over $200 million in new orders, contributing to a total of $900 million in new orders for the year and adding to a substantial $1.2 billion backlog.
In addition, Albany International Corp's stock price target was reduced to $91 from $101 by Truist Securities, following a negative pre-announcement by the company. The firm, however, retained its Buy rating on Albany International. The company also reported negative Engineered Composite Adjustments totaling $24 million within its Aerospace Composites segment, primarily associated with the CH-53K and Gulfstream aerospace programs.
Furthermore, Albany International announced amendments to its bylaws and clarified board procedures. The company's Board of Directors adopted changes to streamline governance and shareholder meeting protocols. The Board's composition is now fixed at nine directors, with clarified guidelines for filling vacancies and the committee's role in electing or removing directors.
Merle Stein, a seasoned professional in the paper and pulp industries, has been appointed President of the Machine Clothing business segment, succeeding Daniel Halftermeyer. Despite facing challenges with the LEAP program due to Boeing's situation, Albany International has maintained overall profitability and anticipates margin improvements in the second half of the year due to operational improvements and program mix.
InvestingPro Insights
Recent data from InvestingPro sheds additional light on Albany International's financial position and market performance. The company's market capitalization stands at $2.42 billion, with a P/E ratio of 22.33. Despite the recent challenges, Albany International has maintained a strong dividend track record, with InvestingPro Tips highlighting that the company has raised its dividend for 6 consecutive years and has maintained dividend payments for 24 consecutive years.
The stock's recent performance aligns with the lowered guidance, as InvestingPro data shows a 1-week price total return of -11.31% and a 1-month return of -13.51%. This decline has brought the stock price to 77.79% of its 52-week high, potentially presenting a value opportunity. An InvestingPro Tip suggests that the stock is trading at a low P/E ratio relative to near-term earnings growth, with a PEG ratio of 0.67 for the last twelve months as of Q2 2024.
Despite the recent setbacks, Albany International remains profitable, with a revenue of $1.25 billion and an EBITDA of $265.62 million for the last twelve months as of Q2 2024. The company's operating income margin stands at a healthy 14.54%, indicating operational efficiency even in challenging times.
For investors seeking more comprehensive analysis, InvestingPro offers additional tips and insights. Currently, there are 11 more InvestingPro Tips available for Albany International, providing a deeper understanding of the company's financial health and market position.
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