Distributors - PVC Pipe Sees Inflation for May; Largest Monlthy Gain in 2 Years

Research evidence excerpt

Distributors - PVC Pipe Sees Inflation for May; Largest Monlthy Gain in 2 Years

Truist Securities

FERG: Valuation and Risks

Our $300 price target is derived by applying a 17x multiple to our calendar year 2027 EBITDA estimate, above the peer group average.

This multiple reflects our growth outlook and margin potential for the company.

Risks to our rating and price target include: a slowdown in residential or commercial construction and remodeling, integration risks from

acquisitions, and volatility in pricing or deflation.

CNM: Valuation and Risks

Our $50 price target is derived by applying a 12x EV/EBITDA multiple to our 2027 estimate, roughly at the average for the peer group,

but below higher valuation distributor names. We believe our multiple assumption is appropriate given our outlook for the company over

the next year.

Upside/Downside risks to our rating and price target include: significant changes in municipal or federal spending as well as in residential

and commercial construction markets, integration risks from acquisitions and the availability of attractive candidates, and volatile changes

in commodity prices.

CRH: Valuation and Risks

Our $140 price target is based on a 12.2x multiple applied to our 2027 EBITDA estimate. This above the 5-year historical average multiple

for the shares. We feel this is justified given the company's exposure to high growth infrastructure markets and shifting portfolio to the

US, which we think should help close valuation gap to peers over time.

Risks to our rating and price target include uncertainty in demand limiting visibility into shipments for non-residential and residential

new construction, persistent inflation that could cut into the pricing gains made on certain products, and integration risks regarding the