Worthington Enterprises: Earnings Growth Likely To Stay Under Pressure

Summary

• Despite an earnings beat, I maintain a hold rating on Worthington Enterprises due to macroeconomic headwinds and deflating steel prices impacting near-term growth.
• 2Q25 results showed a revenue decline of 8% y/y, with CP segment down 2% and BP segment up 4%; adj. EPS beat consensus.
• Elevated interest rates and poor consumer spending outlook are expected to negatively impact both CP and BP segments, leading to lower volumes and margin compression.
• WOR's strong balance sheet and FCF generation capacity are positives, but valuation remains high, not justifying a buy rating amidst uncertain earnings growth.

EschCollection

Investment summary

My previous investment thought on Worthington Enterprises (NYSE:WOR) (published on 27th September) was a hold rating because of the headwinds that I expect the business to face, which would pressure its ability to grow. Despite the earnings

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.