Tuesday, on the stock market, Mueller Water Products (NYSE:MWA) saw an adjustment in their financial outlook from TD Cowen. The firm raised the price target on the company's shares to $23.00, up from the previous $20.00, while maintaining a Hold rating on the stock.
The adjustment by TD Cowen comes as a reflection of the sector's multiples, according to the firm's analysis. The analyst noted that the increase in earnings per share (EPS) for Mueller Water Products was primarily due to a reduction in amortization expenses, as customer-related intangibles were removed from the company's financial statements.
Despite the positive adjustment to the price target, the firm's EBITDA estimate for fiscal year 2025 for Mueller Water Products is slightly lower compared to the previous model. This revision is attributed to a lower than anticipated initial growth guide provided by the company.
The analyst also pointed out that savings are expected from the facility's base case ramp, which is now in place. These savings are projected to begin ramping up starting in the March quarter, indicating potential future financial improvements for Mueller Water Products.
In other recent news, Muir Water Products reported record earnings for fiscal year 2024. The company's fourth-quarter net sales rose to $348.2 million, marking a 15.5% increase year-over-year. For the full year, consolidated net sales surpassed $1.3 billion, driven by robust demand and enhanced customer service. Adjusted net income per share reached a record high of $0.96, up 52% from the previous year.
The company's adjusted EBITDA for the quarter also grew significantly by 30.9% to $72.5 million. In addition, Muir Water Products ended the year with a strong balance sheet, boasting $310 million in cash and a low net debt leverage ratio.
Despite a reported $16.3 million non-cash goodwill impairment and increased warranty expenses, the company's fiscal 2025 projections include consolidated net sales between $1.34 billion and $1.36 billion, and adjusted EBITDA between $300 million and $305 million.
InvestingPro Insights
Mueller Water Products (NYSE:MWA) has been demonstrating strong financial performance, aligning with TD Cowen's positive price target adjustment. According to InvestingPro data, the company's stock has shown impressive returns, with a 104.63% price total return over the past year and an 82.89% return year-to-date. This robust performance is further supported by a significant 33.48% return over the last three months, indicating sustained investor confidence.
InvestingPro Tips highlight that Mueller Water Products has raised its dividend for 10 consecutive years, showcasing a commitment to shareholder value. Additionally, the company operates with a moderate level of debt and has liquid assets exceeding short-term obligations, suggesting a stable financial position.
While the stock's P/E ratio of 34.28 might seem high, it's worth noting that the company's PEG ratio is 0.99, indicating that the stock may be fairly valued relative to its growth prospects. This aligns with TD Cowen's Hold rating and could explain the analyst's cautious optimism.
For investors seeking more comprehensive analysis, InvestingPro offers 16 additional tips for Mueller Water Products, providing a deeper understanding of the company's financial health and market position.
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