In a report released yesterday, Bryan Blair from Oppenheimer maintained a Buy rating on Mueller Water Products (MWA), with a price target of $12. The company’s shares closed yesterday at $9.15, close to its 52-week low of $8.47.
Blair observed:
“Shares remain down ~15% since MWA reported F2Q19 after the close on 5/6, with adj. EPS of $0.12 below our/consensus $0.13/0.14E on lower than anticipated Infrastructure volumes (influenced by severe weather, resi weakness, and the Aurora tragedy). Given these factors, we were not at all surprised by a “noisy” quarter and recognize that MWA’s trade can be volatile around earnings. We will be surprised, however, if shares do not significantly recover over F2H given MWA’s solid fundamental outlook (+MSD core growth, improving operating efficiency/leverage, resultant +DD earnings trajectory) remains intact following temporary F2Q headwinds. This setup in mind, we believe MWA’s current valuation (on FY19E, <9x EV/EBITDA) should prove a very attractive entry point for small-cap investors."
According to TipRanks.com, Blair is a 3-star analyst with an average return of 2.9% and a 56.8% success rate. Blair covers the Industrial Goods sector, focusing on stocks such as Carlisle Companies Incorporated, Lincoln Electric Holdings, and Watts Water Technologies.
Currently, the analyst consensus on Mueller Water Products is a Moderate Buy with an average price target of $11.33, representing a 23.8% upside. In a report issued on May 8, RBC Capital also maintained a Buy rating on the stock with a $12 price target.
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Mueller Water Products’ market cap is currently $1.45B and has a P/E ratio of 47.56. The company has a Price to Book ratio of 2.65.
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Mueller Water Products, Inc. engages in the manufacture and sale of products used in the transmission, distribution and measurement of water. It operates though the following segments: Infrastructure, and Technologies.
