WEST Stock Forecast & Price Target

Westrock Coffee has demonstrated robust sales growth, with a remarkable 35% increase in 2Q25, reaching approximately $281 million, and an anticipated sales target of $1.22 billion for 2026, reflecting a strategic upward revision from $1.17 billion. The Beverage Solutions segment is a significant contributor to this growth, with sales soaring by 60.5% to $263 million, alongside improvements in adjusted EBITDA margins in both the Beverage Solutions and Sustainable Sourcing and Traceability segments. The company's successful fundraising of $30 million through a private placement of convertible notes further enhances its financial flexibility, which is expected to support increased capacity, sales, and adjusted EBITDA in the future.

Westrock Coffee's outlook is negatively impacted by a significant gross margin compression of approximately 510 basis points, resulting in a decrease to 14.7% due to escalating coffee commodity costs, which are anticipated to be passed on to customers. Furthermore, the company has revised its 2026 adjusted EBITDA forecast downward, withdrawing its previous estimate of $130 million to $150 million due to uncertainty surrounding customer demand following the acquisition of JDE Peet's by Keurig Dr Pepper. Additionally, elevated coffee prices, tariffs, and various economic risks, including currency fluctuations, rising interest rates, and weaker consumer confidence, contribute to a challenging operational environment for the firm.