Freedom Capital has downgraded Granite Ridge (GRNT) to a Hold rating and reduced its price target to $7, citing weakening near-term growth prospects and elevated valuation risks. The move reflects a more cautious stance on the stock despite its historical performance.
- Freedom Capital downgraded Granite Ridge (GRNT) to Hold
- Price target reduced to $7 from a prior higher level
- Revenue growth slowed to below 5% YoY in recent quarters
- Gross margins declined 120 basis points over the past year
- Valuation at 22x forward earnings, above sector median of 16x
- No major near-term catalysts identified for stock upside
Freedom Capital has revised its investment rating on Granite Ridge (GRNT) to Hold, marking a shift from its previous positive stance. The firm has also cut its price target to $7, a significant reduction from its prior estimate. This adjustment underscores growing skepticism about the company’s ability to sustain momentum in the current macroeconomic environment. The downgrade follows a series of quarterly earnings reports where Granite Ridge’s revenue growth decelerated, with year-over-year increases falling below 5% in the last two reporting periods. Gross margins have also contracted by 120 basis points over the past year, attributed to rising input costs and supply chain inefficiencies. These factors have prompted the firm to reassess the stock’s near-term upside potential. Analysts note that Granite Ridge’s current valuation, trading at 22 times forward earnings, appears stretched relative to its sector median of 16 times. With no major new product launches or strategic acquisitions on the horizon, Freedom Capital sees limited catalysts to drive meaningful upside in the next 12 months. The revised rating affects institutional investors and retail holders alike, particularly those with positions in growth-oriented portfolios. The stock has underperformed the broader market by 11 percentage points year-to-date, adding pressure on its valuation. Market participants are now closely watching upcoming guidance from management for signs of turnaround or strategic realignment.