Wells Fargo Downgrades Jeld-Wen; Cuts Price Target By ~27%

  • Wells Fargo analyst Deepa Raghavan downgraded Jeld-Wen Holding Inc JELD to Equal Weight from Overweight and lowered the price target to $16 from $22.
  • The analyst states that given the softness in housing new construction and early signs of softness in renovation spending, she has tried to gauge 2023 earnings risk via a couple of downside scenarios.
  • Specifically, she added that forecasting normalized and recession scenarios for the Building Products Coverage that are mostly R&R focused.
  • Raghavan reduced earnings expectations across the board due to the continued impact on outlooks.
  • The analyst mentions that tailwinds behind JELD have dissipated, and the risk-reward is now skewed slightly unfavorable.
  • Raghavan sees the 2H revival story increasingly at risk as macro pressures continue to rise. She noted that the supply chain is normalizing for JELD, with much of the retail inventory and lead times now heading back to pre-COVID levels.
  • The analyst mentions that the Towanda facility divestiture, which is top of investors’ minds, could impact EPS by $0.10-$0.20, all else equal, a risk not considered in the standing guide.
  • Price Action: JELD shares are trading lower by 4.07% at $14.49 on the last check Tuesday.
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