Cautious Outlook on Otter Tail: Hold Rating Maintained Amid Mixed Financial Performance and Market Challenges

Maxim Group analyst Tate Sullivan has maintained their neutral stance on OTTR stock, giving a Hold rating on May 7.

Tate Sullivan has given his Hold rating due to a combination of factors affecting Otter Tail’s financial outlook. The company reported lower-than-expected revenue in the first quarter, primarily due to decreased prices in its PVC pipe segment, although this was partially offset by reduced resin costs, leading to improved profit margins for larger-diameter PVC pipes. Despite these mixed results, Otter Tail maintained its earnings guidance for 2025, projecting a decline in earnings per share compared to the previous year.
Sullivan also noted that while the electric segment performed better than expected, the manufacturing segment suffered from lower demand across several customer sectors, impacting overall revenue. Additionally, the company’s balance sheet showed a slight increase in the net debt-to-capital ratio, and the manufacturing business faced challenges from higher U.S. steel prices due to tariffs. Given these factors, Sullivan decided to maintain a Hold rating, reflecting a cautious outlook on Otter Tail’s ability to achieve significant growth in the near term.

According to TipRanks, Sullivan is an analyst with an average return of -12.7% and a 36.35% success rate. Sullivan covers the Industrials sector, focusing on stocks such as Euroseas, NV5 Holdings, and BWX Technologies.