WEST Stock Forecast & Price Target

Westrock Coffee Co. reported a notable 35% increase in 2Q25 sales, reaching approximately $281 million, and has set a new sales target of $1.22 billion for 2026, reflecting the company's strong growth trajectory. The Beverage Solutions segment demonstrated impressive performance, with a 60.5% sales increase to $263 million, along with an expansion of its adjusted EBITDA margin to 9.4%. Additionally, the ongoing strong demand for flavors, extracts, and ingredients is projected to drive an 18% growth in Beverage Solutions sales, which, combined with increased capacity, positions Westrock favorably for enhanced sales and adjusted EBITDA in the near future.

The negative outlook on Westrock Coffee's stock is primarily influenced by significant gross margin compression, dropping approximately 510 basis points to 14.7% due to increased coffee commodity costs, which will likely be passed on to customers. Additionally, the company's retraction of its 2026 adjusted EBITDA projection from $130 million to a lower range of $98 million reflects growing uncertainty surrounding customer demand, particularly following the recent consolidation in the industry. Furthermore, external market pressures such as rising interest rates, shifts in consumer spending, and overall economic volatility exacerbate the risks facing the company, creating a challenging environment for future profitability.