BMO Capital lowered its price target on GrafTech (NYSE:EAF) to $10.00 from $15.00 and kept a Market Perform rating, a move that follows a recent earnings shortfall and continued weakness in the company’s profitability. GrafTech's shares have plunged 44.22% over the past week and the stock was trading at $7.30, well below BMO’s revised target.
The analyst action comes after GrafTech missed expectations for the fourth quarter of 2025 and presented what BMO described as a "mixed 2026 outlook." Recent financial data highlight the scale of the company's challenges: InvestingPro data show a negative EBITDA of $15.42 million and a trailing twelve-month gross profit margin of -3.11%, signaling persistent margin pressure.
BMO analyst Katja Jancic flagged that GrafTech projects year-over-year growth in sales volumes driven by anticipated market share gains and lower costs per ton, but she cautioned that the company continues to face significant headwinds in pricing and competition. Jancic noted that prices "deteriorated" in the fourth quarter of 2025, creating ongoing pressure even as the company pursues commercial initiatives and cost-management measures.
In BMO's view, the decision to reduce the price target reflects these persistent industry dynamics. As Jancic put it, "the current highly competitive environment remains a risk/challenge" for GrafTech, a comment that underlines the analyst’s concern about the sustainability of any recovery in revenue or margins while competitive pricing persists.
Independent metrics reinforce the picture of financial strain. InvestingPro’s Fair Value assessment indicates the stock is slightly overvalued at current market levels, and the platform assigns GrafTech a Financial Health rating of "WEAK." Those indicators add context to the price-target revision and the maintained Market Perform stance.
Investors are also monitoring near-term reporting: GrafTech is scheduled to release its next quarterly earnings report in four days, an event that market participants expect will provide additional clarity on whether recent actions and commercial efforts are stabilizing results.
Separately, GrafTech International Ltd disclosed a net loss of $65 million for the fourth quarter of 2025, equivalent to a loss of $2.50 per share. The company highlighted declines in average selling prices and adjusted EBITDA as material contributors to its Q4 performance, metrics that market observers regard as central to assessing the firm's financial health.
While the recent results and margins have raised investor concern about the company’s near-term stability and outlook, the available reporting did not include any specific analyst upgrades or downgrades beyond BMO’s revised target and maintained Market Perform rating. Market watchers remain attentive to management’s plans to address the financial setbacks and to the upcoming earnings release for indications of progress or further deterioration.
Overall, BMO’s adjustment of expectations and the recent set of results underscore the immediate challenges GrafTech faces in a competitive pricing environment. The combination of negative EBITDA, a deeply negative gross margin on a trailing basis, and a substantial quarterly net loss frames a cautious near-term outlook, even as the company emphasizes volume gains and cost reductions as paths to recovery.
Key points
- BMO cut its price target on GrafTech to $10 from $15 and retained a Market Perform rating.
- GrafTech reported a Q4 2025 net loss of $65 million, or $2.50 per share, and a trailing twelve-month negative EBITDA of $15.42 million with a -3.11% gross profit margin.
- The company expects higher sales volumes year-over-year from market share gains and lower costs per ton, but faces a deteriorated pricing environment and intense competition.
Summary of impacted sectors
- Materials and industrial manufacturing sectors are directly affected by changes in GrafTech's pricing and demand dynamics.
- Equity markets and investors focused on specialty industrial names are monitoring the company's financial stability and near-term guidance.
Risks and uncertainties
- Persistent competitive pressure and deteriorating prices - these factors are weighing on margins and revenue, with the analyst explicitly calling the environment a "risk/challenge."
- Weak financial health and negative profitability metrics - InvestingPro assigns a "WEAK" Financial Health rating and the company reported negative EBITDA and a negative gross margin on a trailing basis.
- Near-term earnings volatility - GrafTech’s next quarterly report in four days could produce material upside or downside information, given recent misses and the size of the Q4 net loss.
Investors evaluating GrafTech will likely weigh the company's stated volume and cost targets against the demonstrated margin deterioration and recent losses. The coming earnings release should provide additional data points to judge whether commercial and cost-management actions are translating into improved financial performance.