JELD-WEN NYSE:JELD Is A ‘Second Half Story,’ Wells Fargo Says In Downgrade Note
Despite being a well-run company with “significant long-term potential,” the Charlotte, NC-based window manufacturer JELD-WEN Holding, Inc. JELD 2.78% may have to wait some time for another catalyst to push the stock in an upward direction, according to Wells Fargo.
Stephen East of Wells Fargo Securities downgraded JELD-WEN shares from Outperform to Market Perform and lowered the stock’s target price from $45 to $37.
Given the highly competitive nature of the window industry and its exposure to housing market trends, margins are narrow and JELD-WEN has seen its first-quarter margins fall flat, East said in a Wednesday note. (See the analyst’s track record here.)
“We believe that ultimately the window business will have to incent more heavily to recapture lost business,” the analyst said.
JELD-WEN is also exposed to risks in international markets, including raw materials costs in Europe as well as a housing recession in Australia, East said.
Despite the short-term risks and margin pressure, the company, which went public only one year ago, has promising long-term potential, he said.
“It is likely a second half or later story that requires confidence and patience.”
At the time of publication, JELD-WEN shares were trading down 3.91 percent at $33.15. The company reported a fourth-quarter earnings miss Wednesday.