Baird has adjusted its rating on Hillman Solutions (HLMN, Financial), moving it from Outperform to Neutral. This shift comes with a reduction in the price target, now set at $9, down from the previous target of $12. The decision stems from growing concerns about Hillman's exposure to tariffs and challenges in efficiently passing these costs on to consumers.
The firm highlights that while Hillman Solutions has the potential to eventually overcome the issues brought on by tariff-influenced pricing structures, the recovery process may be prolonged. This assessment is based on past experiences, particularly the company's recovery from heightened supply chain costs experienced between 2021 and 2023.
Additionally, Baird points out that ongoing economic uncertainties could negatively impact foot traffic in the home improvement retail sector, adding further pressure on Hillman Solutions' performance. Investors are advised to consider these factors when evaluating Hillman's future prospects.
