Analyst Jeff Osborne from TD Cowen maintained a Buy rating on TPI Composites (TPIC – Research Report) and decreased the price target to $2.00 from $5.00.
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Jeff Osborne has given his Buy rating due to a combination of factors that suggest potential growth for TPI Composites despite current challenges. The company has maintained its revenue outlook for FY25 at $1.4 billion to $1.5 billion, which is a positive indicator given the headwinds faced in the first half of the year. Additionally, the commencement of production at the Newton, Iowa facility is a strategic move that supports the domestic GE repowering opportunity, potentially boosting future revenues.
However, Osborne acknowledges the risks involved, such as the ongoing strategic review that adds uncertainty and the recent reduction in EBITDA margin guidance to 0-2%. Despite these challenges, the expected increase in utilization rates to 80-85% for FY25 and the anticipated strong performance in the third quarter provide a basis for optimism. The company’s efforts to manage costs and ramp up operations in Mexico and Iowa also contribute to the positive outlook, justifying the Buy rating.