Tuesday, an analyst from DA Davidson adjusted the price target for WillScot (NASDAQ:) Mobile Mini (NASDAQ:) Holdings Corp. (NASDAQ:WSC) to $54, down from the previous $56, while maintaining a Buy rating on the stock. The revision reflects a slight recalibration of the company’s earnings forecast for the remaining year.
The analyst noted that the new price target is based on modestly updated expectations, which include a nominal anticipated sequential margin expansion going into the second quarter. This is expected to result from activations and deliveries, followed by a predicted acceleration of profits in the second half of the year as the company sees an increase in leasing revenue.
The adjusted forecasts suggest a back-end loaded year for WillScot Mobile Mini, although the analyst pointed out that this is not significantly different from the typical earnings sequencing observed over the last several years. The new price target represents 12 times and 10 times the firm’s 2024 and 2025 EBITDA forecasts, respectively.
The analyst expressed confidence in the valuation, stating that the multiples “more fairly represent the earnings power/cash flow potential of the combined enterprise of WSC/legacy MINI assets.”
The commentary also highlighted that the company’s initiatives for Storage assets, including pricing and Value-Added Products and Services (VAPS) adoption, are still in the early stages.
WillScot Mobile Mini is expected to benefit from these strategies as they mature, which supports the analyst’s continued Buy rating on the stock. The company’s financial performance and strategic initiatives will be closely watched by investors as the year progresses.
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InvestingPro Insights
The latest market data from InvestingPro paints a mixed picture for WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC). The company boasts an impressive gross profit margin of 55.63% over the last twelve months as of Q1 2024, suggesting strong operational efficiency. Additionally, the company’s management has been actively buying back shares, which is often a sign of confidence in the company’s future prospects and can be supportive of the stock price. However, analysts have tempered their enthusiasm slightly, with four analysts revising their earnings downwards for the upcoming period, indicating potential headwinds or a more conservative outlook on the company’s near-term earnings…
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