Famous activist investor Carl Icahn has left an indelible mark on Wall Street, known for shaking up corporate giants and forcing change from the top down in the name of increasing shareholder value. Icahn has built a reputation as one of the most aggressive and influential figures in this space, often targeting firms he sees as undervalued due to weak governance or poor management. 

And at the center of his empire is Icahn Enterprises (IEP), a high-stakes holding company that channels his bold bets across energy, real estate, auto parts, and more. Yet, despite being steered by one of the most seasoned activist investors in the game, Icahn Enterprises is grappling with serious financial strain. The company reported a significant loss on its investment activities in Q1, deepening its overall losses and raising fresh concerns about its financial health. 

In fact, the company’s portfolio has been under pressure for some time now, and investor confidence continues to be tested by persistent doubts surrounding the sustainability of its dividends. Keeping these factors in mind, is it time to sell IEP stock now? 

About Icahn Enterprises Stock

Florida-based Icahn Enterprises L.P. (IEP) is a diversified holding company with interests in a variety of industries, including investment, energy, automotive, food packaging, real estate, home fashion, and pharmaceuticals, through its subsidiaries. The company’s market cap presently stands at approximately $4.8 billion. 

Shares of Icahn Enterprises are facing significant pressure. Over the past year, IEP has seen a sharp decline of 50%, trailing far behind the broader S&P 500 Index ($SPX), which posted a solid 11.6% gain over the same period. 

Troubles aside, Icahn Enterprises isn’t backing down on its payouts just yet. On May 5, the firm declared a Q1 distribution of $0.50 per depositary unit. This equates to a forward annualized payout of $2 per unit, which translates to an eye-catching yield of 21.88%.

A Closer Look at Icahn Enterprises’ Q1 Performance  

On May 7, Icahn Enterprises released its fiscal 2025 first quarter results, and the market reaction was swift as shares dropped 4.2% on the day of the announcement. The company reported $1.9 billion in revenue for the quarter, down 24% from the same period last year and falling far short of Wall Street expectations by a wide 29% margin.

Bottom-line results also disappointed, with a net loss of $0.79 per share, a steep decline from last year’s $0.09 loss and dramatically below analysts’ forecast of a $0.19 per-share profit. Icahn Enterprises saw a sharp reversal in profitability, with adjusted EBITDA plunging to a loss of $287 million in Q1, down from a positive $134 million in the same quarter last year.

Digging deeper into the numbers, Icahn Enterprises revealed that the indicative net asset value of its portfolio declined by $336 million during the quarter, bringing the total to $3 billion. The company posted a net investment loss of $394 million, a sharp widening from the $96 million loss it reported in Q1 of the prior year. Much of this weakness stemmed from a $224 million hit in the investment segment, largely driven by poor performance in healthcare-related positions.

What Do Analysts Expect for Icahn Enterprises Stock?

Nevertheless, despite the company’s weak performance in the first quarter, Wall Street seems to retain confidence in Icahn Enterprises, with the stock earning a "Strong Buy" rating from the sole analyst tracking it. Meanwhile, the average analyst price target of $15 implies potential upside of 67% from its current price levels.