On Wednesday, UBS has revised its price target for Manitowoc Company Inc (NYSE:MTW), a leading global manufacturer of cranes and lifting solutions, lowering it to $14.50 from the previous target of $18.00. The firm has decided to maintain a Neutral rating on the stock.
The revision reflects a lowered earnings multiple due to several factors affecting the crane demand outlook in the United States non-residential construction sector. UBS cites concerns including the shifting timing of large projects, a continued deterioration in commercial markets, and persistently high interest rates. These elements contribute to the reduced confidence in the sector's ability to sustain crane demand over the next approximately 18 months.
Furthermore, UBS notes additional challenges faced by Manitowoc, such as the ongoing weakness in European tower crane demand, a sluggish market in Asia, and increasing competition in the Middle East. These market conditions have led to a cautious stance on the potential for a significant rebound in demand within the next 12 to 18 months.
As a result of these market dynamics, UBS has also adjusted its estimates for Manitowoc's financial performance in the years 2024 and 2025. The firm now projects approximately flat revenue and margins for the company in 2025. Despite Manitowoc's progress with strategic initiatives, UBS believes that an improvement in market fundamentals is necessary for the stock to reflect earnings growth. However, UBS does not foresee an improvement in these fundamentals in the near term.
In other recent news, Manitowoc Company Inc, a global manufacturer of cranes, has reported a 6% increase in orders for the first quarter of 2024, resulting in a robust backlog of $971 million. Despite a 2.6% year-over-year decline in sales, the company managed to slightly surpass sales expectations, totaling $495 million. Stifel, a financial services company, has adjusted its outlook on Manitowoc, reducing its price target on the stock to $15.00 from the previous $20.00, while maintaining a Hold rating.
Furthermore, Manitowoc has reaffirmed its full-year guidance, projecting sales in the range of $2.275 to $2.375 billion and Adjusted EBITDA between $150 and $180 million. The company is also set to present at the upcoming IDEAS Conference, an event known for bringing together influential investors and companies from various industries.
In addition to these financial updates, Manitowoc has launched 29 new or refreshed crane models since 2021, underlining the company's focus on innovation.
InvestingPro Insights
As UBS revises its stance on Manitowoc Company Inc (NYSE:MTW), a glimpse into the current financial health and market performance of the company through InvestingPro metrics can provide additional context. Manitowoc's market capitalization stands at a modest $427.2 million, with a P/E ratio of 15.57 reflecting investor expectations on earnings. Notably, the company's P/E ratio adjusted for the last twelve months as of Q1 2024 is at a lower 8.2, suggesting a potential undervaluation relative to near-term earnings growth, as highlighted by an InvestingPro Tip. Moreover, the company's PEG ratio during the same period is 0.12, indicating a favorable growth trajectory compared to its earnings multiple.
Despite recent price declines, with a 1-year total return of -33.24%, analysts at InvestingPro highlight the company's solid liquidity position, with liquid assets surpassing short-term obligations, and predict that Manitowoc will be profitable this year. Additionally, the company's revenue growth over the last twelve months as of Q1 2024 stands at 6.38%, underscoring its resilience amidst challenging market conditions. For investors seeking comprehensive analysis, InvestingPro offers additional tips, including the fair value assessments and future earnings revisions. Utilize coupon code PRONEWS24 for an extra 10% off a yearly or biyearly Pro and Pro+ subscription to access these insights and more.
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