WEST Stock Forecast & Price Target

Westrock Coffee Co reported a significant 35% increase in sales for 2Q25, reaching approximately $281 million, reflecting robust demand in its Beverage Solutions and Sustainable Sourcing and Traceability segments. The company has adjusted its 2026 sales growth target upward to $1.22 billion, driven by an anticipated 18% sales growth in the Beverage Solutions segment, which benefits from strong demand for flavors, extracts, and improvements in k-cup and ground coffee businesses. Additionally, the expansion of adjusted EBITDA margins in both segments highlights operational efficiency, with Beverage Solutions margin increasing by 130 basis points to 9.4% and Sustainable Sourcing and Traceability margin rising by 370 basis points to 4.6%, enhancing the overall profitability outlook for Westrock Coffee.

Westrock Coffee Co is experiencing a significant compression in its profitability, with an anticipated adjusted EBITDA margin decline of 150 basis points to 4.5% and a gross margin decrease of 80 basis points to 19.1%. The company is facing challenges primarily due to a dramatic gross margin compression of approximately 510 basis points related to rising coffee commodity costs, which will need to be passed on to customers. Furthermore, the broader economic risks, including volatility in commodity prices, declining consumer confidence, and rising interest rates, contribute to an uncertain outlook for Westrock's performance in the market.