On Nov 12, major Wall Street analysts update their ratings for $Advanced Drainage (WMS.US)$, with price targets ranging from $155 to $184.
Barclays analyst Matthew Bouley maintains with a buy rating, and adjusts the target price from $194 to $172.
UBS analyst John Lovallo maintains with a hold rating, and adjusts the target price from $179 to $155.
Loop Capital analyst Garik Shmois maintains with a buy rating, and adjusts the target price from $180 to $170.
Baird analyst Michael Halloran maintains with a buy rating, and adjusts the target price from $187 to $161.
Oppenheimer analyst Bryan Blair maintains with a buy rating, and adjusts the target price from $192 to $184.
Furthermore, according to the comprehensive report, the opinions of $Advanced Drainage (WMS.US)$'s main analysts recently are as follows:
The company's outlook has been adjusted due to a combination of factors including the non-residential sector, weather-related challenges, and rising input costs.
The company's Q2 earnings fell short of expectations, and subsequent guidance revision came unexpectedly as the quarter appeared to be aligning well despite the erratic non-residential environment. Sales did not meet forecasts due to storm-related impacts and adverse price-to-cost conditions. Nonetheless, the period's highlights were bolstered by robust infrastructure and residential sales.
The firm observed that shares declined by 14.3% following the company's Q2 performance, which fell short of expectations, and its subsequent reduction in FY25 guidance. This adjustment was made to account for ongoing volatility in non-residential demand, delays in projects due to hurricanes, and persisting challenges with pricing and costs. In light of the results from the first half of the year and prevailing business trends, the company has revised its FY25 sales forecast. Despite the disappointing results and lowered guidance, the opinion is that the risks for the second half of the year have been significantly mitigated. The firm suggests that the market's reaction may have been excessive and sees this as an opportune moment for investors to consider engaging with this unique water management asset.
The reduction in margins was anticipated due to well-known inconsistencies within the Non-Residential sector. The impression is that the investor concerns largely centered around the extent of margin pressures resulting from pricing strategies. However, this seems primarily linked to elevated input costs rather than a weakening of top-line pricing. Despite a more cautious outlook on end-market and margin trends, the view is that the current decline in share price presents an opportunity to invest in a robust narrative that is bolstered by material conversion drivers and numerous opportunities for sustained margin improvement.
Apart from reducing estimates and adjusting for lower non-residential expectations, the primary concern is centered on the challenge of increasing prices to counterbalance rising material costs, which is essentially a cyclical debate. However, pricing remains stable on a sequential basis, and it is anticipated to recover alongside demand. Moreover, the absolute margin levels remain noteworthy.
Here are the latest investment ratings and price targets for $Advanced Drainage (WMS.US)$ from 6 analysts:
Note:
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