- BWS Financial Analyst Hamed Khorsand reiterated a Sell rating on the shares of WD-40 company WDFC with a Price target of $88.
- The company reported that Q4 results missed guidance due to the slower rollout of price increases, and went ahead Inflationary pressures on input costs.
- The analyst said WD-40 sales benefited as certain customers brought forward orders in anticipation of announced price increases during the fiscal fourth and first quarters.
- The failure underscores Khorsand’s ongoing concerns in the business, where the company relies on price hikes to fill demand gaps, with management confirming unit volumes declined in the fourth quarter and unit volumes could decline in fiscal 2023.
- The analyst cites that the company has increased prices to offset increases in input costs related to petroleum-based specialty chemicals and aerosol cans.
- He said there was no timeline as to when there might be cost relief. Khorsand added further price hikes could be pushed back by customers.
- WD-40 generated negative free cash flow in fiscal 2022 and there is no insured free cash flow that will become positive in fiscal 2023.
- also read: What Happens To The WD-40 Company’s Stocks Falling Today?
- Price promotion: WDFC shares trade 8.62% lower at $156.11 on the last check Thursday.
© 2022 Benzinga.de. Benzinga does not provide investment advice. All rights reserved.
