Roth/MKM raises Vanguard’s shares target, Sees Improved Outlook

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On Friday, American Vanguard Corp . (NYSE:) received a positive update from Roth/MKM as their share price target was raised to $16.00, up from the previous $13.00, while retaining a Buy rating on the stock. The adjustment followed the company’s fourth-quarter 2023 performance, which aligned with the preliminary guidance provided earlier.

The firm’s analyst noted that American Vanguard has increased its AEBITDA target to the range of $70 million to $80 million, attributing the rise to improved operating leverage. The company also reaffirmed its 2024 revenue growth target for its core business, aiming for an 8% to 12% increase. The focus for American Vanguard remains on enhancing operating profit through various initiatives aimed at cost reduction, margin expansion, and revenue growth.

The company has already achieved a $15 million benefit from these initiatives through improvements and optimization efforts. Additionally, the resolution of supply chain issues, the normalization of channel inventories, and better working capital management, which is anticipated to reduce debt, were highlighted as positive developments.

The report from Roth/MKM concluded with an optimistic outlook, stating that American Vanguard’s internal initiatives are expected to drive both growth and margins, justifying the increase in the price target to $16.00. This represents a notable vote of confidence in the company’s strategic direction and its potential for future financial performance.

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