A B.Riley analyst announced a reduction in the price target for Matthews International (NASDAQ: NASDAQ:MATW) to $40.00, a decrease from the previous $54.00, while still retaining a Buy rating on the stock.
The revision reflects lowered expectations for the company's Industrial Technology segment's contributions in the coming year.
The analyst's decision to lower the price target is based on anticipated deferrals of orders in the Industrial Technology sector into the fiscal year 2025.
Despite this adjustment, the Memorialization and SGK divisions of Matthews International are reported to be performing according to expectations.
The revised price target of $40 takes into account a lesser contribution from the Industrial Technology segment for the fiscal year 2024.
The analyst pointed out that the current trading price of Matthews International's shares is below the combined value of the Memorialization and SGK businesses, after deducting overhead expenses, and does not attribute any value to the Industrial Technology division.
In other recent news, Matthews International Corporation has announced plans for a senior notes offering to redeem existing debt. The proceeds from this private offering, combined with borrowings under the company's senior credit facility, are intended to redeem all outstanding 5.25% senior notes due December 1, 2025.
The company has clarified that the notes will not be offered or sold in any jurisdiction where such an offer would be unlawful without registration or qualification. The corporation has also reported mixed results for its third quarter of fiscal year 2024, with a net income of $1.8 million and consolidated sales of $427.8 million. Despite challenges in the Industrial Technologies segment, the Memorialization, and SGK Brand Solutions segments showed solid performance.
The company is currently managing a lawsuit with Tesla (NASDAQ:TSLA) but remains confident in its proprietary technology. Matthews International is also focusing on cost reduction programs and is in negotiations for significant orders from national brands.
InvestingPro Insights
Matthews International (NASDAQ:MATW) has been navigating a challenging period, as reflected in recent analyst revisions and market performance. According to InvestingPro data, the company has a market capitalization of $688.75 million and is trading at a P/E ratio of 26.86, with an adjusted P/E ratio for the last twelve months as of Q3 2024 at 17.64. Despite the decrease in revenue growth by -1.54% over the last twelve months, the company's dividend yield stands at an attractive 4.27%, showcasing its commitment to shareholder returns.
Two InvestingPro Tips that stand out for Matthews International are its significant debt burden and the fact that it has raised its dividend for 26 consecutive years. The latter is particularly noteworthy as it demonstrates a consistent return to shareholders, a factor that can be appealing for income-focused investors. Additionally, the company has been trading near its 52-week low, which could indicate a potential entry point for value investors, especially considering its low P/E ratio relative to near-term earnings growth.
For those interested in a deeper dive, there are additional InvestingPro Tips available, providing a comprehensive analysis of the company's financial health and stock performance. You can explore these further by visiting the InvestingPro platform for Matthews International at https://www.investing.com/pro/MATW.
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