Core & Main shareholders faced a challenging period as the company’s stock plunged nearly 21% during the shortened trading week, according to S&P Global Market Intelligence data. Unfortunately, the company’s recent announcements were not particularly reassuring, nor were the subsequent analyst price target reductions.
A Quarter to Overlook
Core & Main, which focuses on supplying products to utilities and large industrial clients, released its second-quarter earnings on Wednesday before the market opened. On the positive side, sales increased by almost 6% to $1.96 billion, while net income rose by 8% to $119 million, or $0.61 per share.
However, both figures fell short of the average analyst predictions, which was disappointing. To add to this, the company’s management lowered its full-year revenue forecast, citing weather disruptions among other reasons for both the underwhelming performance and the revised guidance.
Analysts Turn More Cautious
In the days following the report, several analysts tracking Core & Main stock lowered their future expectations. Notably, Keith Hughes from Truist revised his price target for the shares to $38, a notable drop from his prior target of $50.
Despite maintaining a hold recommendation, Hughes noted in a new research note the “unusual” weakness in the company’s key municipal client segment. He suggested that the negative market reaction was largely due to the guidance cut, and he anticipated that the market expects further reductions ahead.
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