GrafTech International: Hold Rating Amid Market Oversupply and Strategic Cost Management
Katja Jancic has assigned a Hold rating to GrafTech International, citing positive EBITDA and free cash flow but challenges due to market oversupply and weak demand for graphite electrodes. The company is focusing on cost management and commercial activities, which may enhance market share in the US. Despite improved liquidity, subdued pricing and reduced sales expectations for 2025 have led to a lowered EBITDA forecast for FY2026. RBC Capital also maintains a Hold rating with a $21.00 price target, reflecting a cautious outlook.
Katja Jancic has given her Hold rating due to a combination of factors impacting GrafTech International’s current and future performance. The company has shown positive EBITDA and free cash flow, indicating effective cost and working capital management. However, the overall market for graphite electrodes is currently oversupplied with weak demand, which poses challenges for pricing and revenue growth.
Despite these challenges, GrafTech is focusing on commercial activities and cost management, which could lead to market share gains, particularly in the US. The company’s liquidity position has improved, providing a buffer against the challenging operating environment. Nonetheless, the subdued pricing environment and reduced sales expectations for 2025, due to avoiding low-margin sales, have led to a trimmed EBITDA forecast for FY2026. These mixed factors contribute to the Hold rating, reflecting a cautious but stable outlook.
In another report released yesterday, RBC Capital also maintained a Hold rating on the stock with a $21.00 price target.
