Jefferies Cuts Price Target on WestRock (WRK) to $59 Following 3Q
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Jefferies maintained a Buy rating on WestRock LLC (NYSE: WRK), and cut the price target to $59.00 (from $62.00), following the company's 3Q earnings report. WRK's guidance assumes $175-200 mil of input cost inflation. Inflation should primarily be driven by higher OCC & energy/diesel costs, but management is assuming current commodity prices and not factoring any seasonality.
Analyst Philip Ng commented, "While WRK's implied EBITDA guidance is softer than expected, we suspect mgmt is being conservative and FCF is expected to grow 20% YOY, with shares trading with an 11% FCF yield. The inflation guidance seems high, but not shocking as WRK is trying to implement a box price increase and we have higher conviction it will stick."
Shares of WestRock LLC closed at $45.27 yesterday.
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