Made in the USA: This domestic manufacturer could benefit from tariffs, Canaccord Genuity says

CNBC

05-05-2025

With most if its manufacturing done in the United States, Worthington Enterprises is a tariff-proof stock that can benefit from record-high duties slapped on imported goods, according to one Wall Street analyst. Shares in the Columbus, Ohio-based company that makes dozens of consumer and industrial products, from Coleman propane tanks to acoustic ceiling systems, are already 37% higher in 2025. "We believe this stock is primed for outperformance, being a hidden gem that many investors are generally unaware of since its December 2023 separation from its Steel business, Worthington Steel," Canaccord Genuity analyst Brian McNamara wrote in a Sunday note. The investment bank upgraded Worthington to buy from hold, and raised its price target by 24%, to $67 per share from $54. Canaccord's forecast implies roughly 23% upside from Friday's $51.99 close. McNamara said a recent meeting with company executives left him more optimistic, given Worthington's "advantageous" manufacturing position. WOR YTD mountain Worthington Enterprises stock in 2025. "The wide-ranging conversations demonstrated a humble, yet confident management team that believes it is well positioned with predominant domestic manufacturing in a tariff-riddled environment," the analyst said. McNamara noted that Worthington is the sole domestic manufacturer of gas grill cylinders and that peers have moved manufacturing overseas, giving the company a leg up as tariffs push higher. At the same time, McNamara estimated that only $60 million to $80 million of Worthington's annual revenue comes from products sourced from China. Estimated sales in the fiscal year ending May 31 are pegged to come in at $1.137 billion, according to analyst polled by FactSet. "Some relatively low-priced components and small valves are affected by China tariffs, but management noted they have good relationships, which will help with mitigation efforts," McNamara said. "The most significant component is steel, which WOR purchases domestically." The analyst also forecast that if competitors raise prices in response to tariffs, Worthington won't follow suit or not to the same extent. "If tariff-exposed competitors raise prices, we expect WOR to take less price and prioritize [market] share gains," McNamara wrote.