Worthington Industries (WOR) PT Lowered to $67 at Canaccord

Canaccord analyst Brian McNamara lowered the price target on Worthington Industries (NYSE: WOR) to $67.00 (from $69.00) while maintaining a Buy rating.

The analyst commented: "After the market closed yesterday, Worthington Enterprises (WOR) reported disappointing Q4 results in its tenth “clean” reporting after separating from its steel business. Sales increased +17% y-o-y to $372m, or +3% organically, but 3%/4% below CGe/consensus. Adjusted EBITDA and adjusted EPS came in ~6% and ~9% below the Street, respectively. Headwinds from ClarkDietrich and the cooling and construction business resulted in Q4 profits declining y-o-y. However, WOR has a material emerging growth opportunity in data centers across Building Products, including WAVE, Elgin, LSI, and its Water business. WOR shipped $13m into data centers on the ASME side in 2026 and plans to ship at least that much in Q1 2027. Given the sizable miss, the shares naturally lagged the market today, and we think the stock remains undervalued. Its WAVE JV (50/50 owned with Armstrong World Industries) continues to be a crown jewel that performs well each quarter. We estimate WOR’s share of WAVE’s LTM EBITDA is ~$130m, and if we assign a 14x multiple – which we think is reasonable for a best-in-class Industrial business it implies a value of $1.82bn, or ~61% of the company’s current EV. This implies investors are getting the rest of the business for ~6x 2027E EBITDA, which is way too low, in our view. We adjust our estimates lower to reflect tough comparisons and the related impacts of tough A2L refrigerant comps, which should linger into Q2. We lower our price target to $67 ($69 prior) but reiterate our BUY rating."

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