UFPI Stock Forecast & Price Target

UFP Industries has demonstrated robust financial performance, highlighted by a ~20% sales increase in its product line and flat year-over-year sales in the Retail segment, which aided in expanding gross margins due to operational improvements. Revenue forecasts for FY25 and FY26 have been revised upward to $7.2 billion and $7.5 billion, respectively, with AEBITDA projections increasing to $779 million and $812 million, reflecting sustained profitability and growth initiatives in key segments. The company has also identified $1 billion in investment opportunities to enhance growth and efficiency, further supporting a positive outlook given the expected mid-single digit revenue growth in UFP Construction and UFP Retail, alongside favorable market conditions in the broader economy.

UFP Industries is expected to experience a 2% year-over-year sales decline to $1.8 billion in F3Q24, with a projected gross margin decrease of 80 basis points to 19.1% primarily due to unfavorable sales mix and declining lumber prices. Management anticipates slight declines across all three segments in the first half of 2025 as soft demand persists, leading to increased competitive pricing pressures. Additionally, the company's mixed fourth-quarter results highlight a concerning trend where earnings per share fell below estimates despite a revenue beat, emphasizing potential negative impacts from ongoing demand weakness in the packaging and construction segments.