WMS: Investor Day Quick Take: Sets Above-Expectation F2030 Organic Target of +8%; +30% EBITDA Margins

研报英文原文证据摘录

WMS: Investor Day Quick Take: Sets Above-Expectation F2030 Organic Target of +8%; +30% EBITDA Margins

EQUITY RESEARCH QUICK TAKE

RBC Capital Markets, LLC

Jeffrey Reive, CFA (Analyst)

Deane Dray, CFA (Co-Head of Global Industrials

Research)

Kenny Sim, CFA (AVP)

Thomas Wisnewski, CFA (Senior Associate)

June 18, 2026

Advanced Drainage Systems, Inc.

Investor Day Quick Take: Sets Above-Expectation F2030 Organic Target of +8%; +30%

EBITDA Margins

NYSE: WMS | USD 139.16 | Outperform | Price Target USD 170.00

Sentiment: Neutral

Our view: Ahead of its Investor Day at its Engineering and Technology Center in Hilliard, Ohio, Outperform-rated Advanced Drainage

issued its F2030 financial vision with an upside organic growth target. Management targets +8% organic revenue growth, above

our 6%-7% expectation (note here) and in-line/above the company's already-impressive 8% organic CAGR from F2020-F2026. The

framework includes +$4 billion in revenue (including M&A), +30% Adj. EBITDA margins, +$1.2 billion of Adj. EBITDA, and +70%

cash flow from operations conversion to EBITDA (vs. our +65% estimate). We view the organic growth target as a meaningful

positive, underpinned by market growth (LSD%-MSD%), material conversion (LSD%), and mix-shift toward higher-growth Allied

Products and Infiltrator (MSD%). The EBITDA margin target of +30% is potentially conservative given F2027 margin guidance of

29.6%-29.9%, but we note the target is framed over a four-year period that includes potential M&A dilution and is dependent on

input cost trajectories. Capital deployment of $5 billion (operating cash flow plus leverage capacity to 2x) is above our +$2.5 billion

estimate through F2029, though the additional year and willingness to lever toward 2x (vs. the prior 1x-2x guardrails) explains