WEST Stock Forecast & Price Target

Westrock Coffee Co demonstrated a strong financial performance with a 35% increase in sales for 2Q25, reaching approximately $281 million, underpinned by significant growth in its Beverage Solutions segment, which saw a 60.5% rise to $263 million. The company's strategic initiatives are projected to drive an 18% growth in Beverage Solutions sales, supported by robust demand for flavors, extracts, and improvements in the k-cup and ground coffee markets. Additionally, the expansion of adjusted EBITDA margins in both the Beverage Solutions and Sustainable Sourcing and Traceability segments reflects operational efficiencies that are likely to enhance profitability moving forward.

Westrock Coffee Co. faces significant headwinds, as evidenced by an anticipated gross margin compression of approximately 510 basis points, resulting in a decline to 14.7% due to escalating coffee commodity costs that will be shifted to customers over time. The company has revised its adjusted EBITDA forecast for 2026 down to $98 million, a notable decrease from the previously estimated range of $130 million to $150 million, primarily influenced by a key customer's demand uncertainty linked to industry consolidation. Furthermore, underlying risks, including commodity cost volatility, rising interest rates, and diminished consumer confidence, add to the negative outlook on the company's financial prospects.