Masco Announces $350M Accelerated Share Repurchase Agreement

Masco Corporation (MAS), the manufacturer of products for the home improvement and home construction market, has announced an accelerated share repurchase agreement (ASR) with Royal Bank of Canada to repurchase an aggregate of $350 million of its common stock.

The ASR is part of Masco’s existing share repurchase program announced on February 9. Under the agreement, the company was authorized to buy up to $2 billion shares.

As per the ASR agreement, Masco will initially receive about 5.1 million shares on June 10, with the final settlement expected to be completed by July 29. The final number of shares to be repurchased by Masco will be based on the volume-weighted average stock price of the company’s common stock during the term of the agreement, less a discount, and subject to adjustments. (See Masco Corp stock analysis on TipRanks)

On April 15, Raymond James analyst Sam Darkatsh assigned a Hold rating to the stock.

Darkatsh said, “We expect broad R&R demand to remain robust in 2021, allowing Masco to grow organically for the year despite onerous second half comparisons. However, we think Masco’s significant DIY exposure limits its upside potential versus other building products names which have more of a focus on ‘do-it-for-me’ (i.e., professionally installed) projects. Increasing raw material inflation and an extended valuation add to our caution.”

The rest of the Street is cautiously optimistic about the stock with a Moderate Buy consensus rating based on 5 Buys and 4 Holds. The MAS average analyst price target of $71.57 implies 22.5% upside potential from current levels. Shares have increased 7.5% over the past six months.

Masco scores a 7 of 10 on TipRanks’ Smart Score rating system, indicating that the stock is likely to perform in line with market averages.

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