WEST Stock Forecast & Price Target

Westrock Coffee Co demonstrated a solid performance in 4Q24, achieving a 6.5% increase in sales to $229 million, and forecasts indicate continued growth with total sales expected to rise by 9.0% to $914 million for the upcoming year. The Sustainable Sourcing and Traceability segment experienced remarkable growth, with a 38% sales increase to $55 million, contributing to an optimistic projection of approximately 50% annual growth in adjusted EBITDA over the next two years as new revenues from key facilities are anticipated. Additionally, Westrock's strategic initiatives, such as securing new retail and single-serve customers, alongside cost-saving measures, are expected to drive further advancements in its core coffee business.

Westrock Coffee Co is facing significant challenges that contribute to a negative outlook, including anticipated adjusted EBITDA margin compression of 85 basis points to 5.5%, down from 7.3%, coupled with a projected decline in total sales growth of approximately 1.0% in 4Q24, exacerbated by a 6.5% decrease in sales from the Beverage Solutions segment. The company’s 2025 adjusted EBITDA guidance falls short of expectations, ranging from $60 million to $73 million, which reflects softened demand due to rising coffee prices and delays in scaling operations at its Conway, AR facility. Additionally, the uncertainty surrounding the onboarding of customers and execution difficulties indicates that future profitability may continue to be hindered, further justifying the cautious outlook.