Masco Corporation: MAS 2Q26 slightly below expectations, excluding IEEPA refunds - first take

研报英文原文证据摘录

Masco Corporation: MAS 2Q26 slightly below expectations, excluding IEEPA refunds - first take

Forecast returns

Forecast price appreciation 18.9%

Forecast dividend yield 1.6%

Forecast stock return 20.5%

Market return assumption 9.3%

Forecast excess return 11.2%

Company Description

Masco (MAS), headquartered in Livonia, MI, is a leading global manufacturer of plumbing

and decorative architectural products. The company is primarily focused on the R&R market,

with roughly 90% exposure. MAS goes to market with numerous well-known brands,

including Delta, Peerless, Brizo, Hansgrohe, Behr, Kilz, and Liberty Hardware.

Valuation Method and Risk Statement

Price Target Methodology: Our $97 PT on MAS shares is based on an 2026e EV/2027e EBITDA

multiple of roughly 14x and implies a 2027e P/E multiple of roughly 20x. In our view, MAS’s

business rationalization has not been fully reflected in its valuation to date, but could become

more apparent in a normalizing housing market where differentiation among stocks returns.

As such, we believe our target multiples are appropriate.

Risks: 1) slowing economic activity could lower consumer confidence and cause delays in big-

ticket purchases such as remodeling, 2) US relations with China could negatively impact the

availability of plumbing components, 3) demand for automation technologies in plumbing

fixtures may fail to gain meaningful traction, 4) a slowing economy could negatively impact

discretionary purchases such as Watkins spas and pools, 5) new COVID variants may delay

consumer willingness to allow professional painters and contractors into their homes, 6)

pricing power may be insufficient to offset rising raw materials costs, 7) higher diesel costs