Shares of Reynolds Consumer Products Inc. (REYN) fell 5.03% intraday on Thursday, following multiple analysts lowering their price targets and ratings on the stock.
Barclays maintained its Equal-Weight rating on REYN but reduced the price target to $25 from $27, citing concerns over the company's profitability and earnings prospects. Analyst Lauren Lieberman noted in her report that Reynolds' efforts to drive growth and expand margins through strategic initiatives might face challenges in the current economic environment.
Similarly, RBC trimmed its price target on REYN to $30 from $32, keeping a Sector Perform rating. The firm expressed caution over the company's near-term outlook and highlighted the potential impact of higher raw material costs on its margins.
During the company's Q4 2024 earnings call, Reynolds Consumer Products reported lower-than-expected revenue guidance for 2025, driven by anticipated category declines, particularly in the foam segment. The company also projected higher operational costs and raw material headwinds, which could weigh on its profitability.
However, Reynolds' management remained optimistic about the company's long-term growth prospects, citing ongoing strategic initiatives and investments in innovation, distribution, and cost-cutting measures. The company plans to implement pricing actions, productivity improvements, and capital investments to offset the challenges and drive future growth.
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