Catalysts
- Cost Reductions: Over $70M in annualized savings from facility consolidation and SG&A cuts could boost margins.
- Acquisitions: Recent deals may enhance growth.
- Share Repurchases: A $200M program could support the stock.
- Market Recovery: A rebound in housing/construction demand would benefit UFP.
Assumptions
- 9% EPS growth to 2025 ($7.42), per consensus.
- 3% long-term revenue growth, as forecasted.
- 12% discount rate and 16x P/E reflect UFP’s risk and prospects.
Risks
- Earnings Weakness: Further misses or downgrades (e.g., Wedbush cut 2025 EPS to $7.36 from $7.42).
- Economic Slowdown: Impacts construction demand.
- Competition: Pricing pressure in a cyclical industry.
- Volatility: Beta of 1.45 indicates higher risk.
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Disclaimer
The user Panayiotis holds no position in NasdaqGS:UFPI. Simply Wall St has no position in any of the companies mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The author of this narrative is not affiliated with, nor authorised by Simply Wall St as a sub-authorised representative. This narrative is general in nature and explores scenarios and estimates created by the author. The narrative does not reflect the opinions of Simply Wall St, and the views expressed are the opinion of the author alone, acting on their own behalf. These scenarios are not indicative of the company's future performance and are exploratory in the ideas they cover. The fair value estimates are estimations only, and does not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that the author's analysis may not factor in the latest price-sensitive company announcements or qualitative material.
