Last Update 22 Jun 26
Fair value Decreased 2.68%WOR: Q4 Earnings And Ongoing Buybacks Will Shape Balanced Future Outlook
Analysts have reduced their price targets for Worthington Enterprises by about $1.80, reflecting slightly more conservative assumptions on fair value, discount rate, revenue growth, profit margins, and future P/E multiples.
What’s in the News for Worthington Enterprises
- Worthington Enterprises plans to release its fiscal Q4 2026 results after market close on June 23, with an earnings call scheduled for June 24 to review quarterly performance and answer questions. Source: company earnings announcement.
- The upcoming Q4 call is expected to include management commentary on guidance for fiscal 2027, which many investors are watching closely, given recent analyst concerns about near term demand and margin pressures. Source: company earnings announcement.
- Analysts currently expect earnings per share of $1.06 for Worthington Enterprises in fiscal Q4 2026, alongside recent downward revisions tied to these demand and margin worries. Source: company earnings announcement.
- From December 1, 2025 to February 28, 2026, Worthington Enterprises repurchased 100,000 shares for US$5.37 million, bringing total buybacks under the program announced on June 25, 2014 to 24,132,319 shares, or 42.1%, for US$1,019.64 million. Source: buyback tranche filing.
Valuation Changes for Worthington Enterprises
- Fair Value: reduced slightly from $67.20 to $65.40, reflecting more cautious assumptions in the updated model.
- Discount Rate: raised marginally from 8.60% to 8.66%, implying a slightly higher required return on Worthington Enterprises.
- Revenue Growth: trimmed from 6.19% to 5.96%, suggesting a more conservative view on Worthington Enterprises’ top line outlook.
- Net Profit Margin: eased from 14.44% to 14.05%, pointing to modestly lower expected profitability.
- Future P/E: brought down from 19.06x to 17.77x, indicating a lower valuation multiple applied to Worthington Enterprises’ projected earnings.
Key Takeaways
- Strategic partnerships and new product launches are expected to drive revenue growth and market expansion for Worthington Enterprises.
- Investments in operational efficiencies and acquisitions are anticipated to improve margins and enhance earnings growth.
- Market uncertainties, price impacts, and M&A challenges could pressure revenue, margins, and net earnings, with risks from consumer sentiment and customer credit.
Catalysts
About Worthington Enterprises- Operates as an industrial manufacturing company.
- Worthington Enterprises is leveraging innovation to drive growth, as evidenced by the launch of new IoT-enabled and consumer products like SureSense and Balloon Time Mini, which are expected to increase revenues.
- The company is investing in operational efficiencies through facility modernization projects and automation, anticipated to improve net margins over time.
- Strategic partnerships and new market entry, like those with Tractor Supply and Walmart, are expected to expand distribution channels and support revenue growth.
- The integration of recent acquisitions, such as Ragasco, and enhanced M&A activity are anticipated to be accretive to margins and drive earnings growth.
- Worthington's low leverage and strong balance sheet offer flexibility for further growth initiatives, including M&A, which could positively impact EPS.
Worthington Enterprises Future Earnings and Revenue Growth
Assumptions
How have these above catalysts been quantified?
- Analysts are assuming Worthington Enterprises's revenue will grow by 6.0% annually over the next 3 years.
- Analysts assume that profit margins will increase from 8.4% today to 14.0% in 3 years time.
- Analysts expect earnings to reach $221.9 million (and earnings per share of $4.47) by about June 2029, up from $111.8 million today.
- In order for the above numbers to justify the price target of the analysts, the company would need to trade at a PE ratio of 18.0x on those 2029 earnings, down from 26.6x today. This future PE is lower than the current PE for the US Machinery industry at 28.0x.
- Analysts expect the number of shares outstanding to decline by 1.14% per year for the next 3 years.
- To value all of this in today's terms, we will use a discount rate of 8.66%, as per the Simply Wall St company report.
Risks
What could happen that would invalidate this narrative?- Market and trade uncertainties, such as tariffs and trade-related issues, could impose cost pressures and supply disruptions, potentially affecting future revenues and margins.
- Decreasing steel prices have negatively impacted equity earnings from joint ventures like ClarkDietrich, leading to margin compression, which could impact earnings.
- Macro-economic uncertainties and potential changes in consumer sentiment could impact demand in the Consumer Products segment, affecting revenues and profitability.
- A headwind was noted from the bankruptcy of a customer, which could indicate potential credit risks or bad debts impacting net earnings.
- M&A and expansion initiatives may not yield the anticipated growth or could stretch resources, thereby presenting risks to net margins and earnings if integrations do not proceed smoothly.
Valuation
How have all the factors above been brought together to estimate a fair value?
- The analysts have a consensus price target of $65.4 for Worthington Enterprises based on their expectations of its future earnings growth, profit margins and other risk factors.
- However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $76.0, and the most bearish reporting a price target of just $47.0.
- In order for you to agree with the analysts, you'd need to believe that by 2029, revenues will be $1.6 billion, earnings will come to $221.9 million, and it would be trading on a PE ratio of 18.0x, assuming you use a discount rate of 8.7%.
- Given the current share price of $60.4, the analyst price target of $65.4 is 7.6% higher. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
- We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.
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Disclaimer
AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.
