Truist initiates Matthews International stock at Hold on timing concerns

Truist Securities has assigned a Hold rating to Matthews International Corp. (NASDAQ:MATW) with a price target of $24.00, according to a report published Thursday. The stock is currently trading at $21.66, close to its 52-week low of $21.50. InvestingPro analysis indicates that Matthews International is potentially undervalued, with a Fair Value of $25.68.

The firm has identified possible catalysts that could help the company reduce leverage and boost earnings growth, which is especially significant given its total debt of $628 million against a market cap of $676 million and a debt-to-equity ratio of 1.29. However, Truist’s analysis points out that the current valuation does not assign significant value to the Industrial Technologies segment, which once boosted shares to around $48.

The company has faced difficulties in meeting guidance in recent quarters, which has contributed to Truist's cautious outlook on the stock. Matthews International's recent financial results for its fiscal third quarter of 2026 have been disappointing, with adjusted earnings per share at $0.06, far below the consensus estimate of $0.38, and revenue falling to $246 million, below both the $272.5 million forecast and the $349 million achieved in the same quarter last year.

Factors such as divestitures, weak engineering demand, and higher costs have impacted the company's performance. Truist has acknowledged the potential upside if several favorable events occur, but the firm remains uncertain about the timing and likelihood of these catalysts materializing. The $24 price target reflects the firm's assessment of the company's prospects under the current uncertainties.