MAS - Embedded Expectations Analysis - 2020 09 28
Masco Corporation (MAS:USA) currently trades near historical averages relative to UAFRS-based (Uniform) earnings, with an 18.3x Uniform P/E. At these levels, the market has bullish expectations for the firm, while management may have concerns about sales declines, supply chain disruptions, and demand recoverySpecifically, management may lack confidence in their ability to mitigate pro paint sales declines, manage through the pandemic, and control costs as demand improves. Moreover, they may have concerns about supply chain disruptions, the sustainability of the demand recovery seen in June, and the volatility and variability in their sales guidance. Furthermore, they may lack confidence in their ability to capitalize on the structural shift in the DIY market and sustain Kichler and Liberty product growth. Additionally, they may be exaggerating the strength of their capital allocation and they may be downplaying concerns about supply chain disruptions. Finally, management may lack confidence in their ability to generate wins during the recovery and serve their customers through the summer months, and may be exaggerating propane demand improvements
Masco designs, manufactures and distributes home improvement and building products. The company's Plumbing Products include faucets, showerheads, handheld showers, valves, bath hardware and accessories, bathing units, shower bases and enclosures and toilets. This segment also includes brass, copper and composite plumbing system components and other non-decorative plumbing products. The company's Decorative Architectural Products include cabinet and door hardware, functional hardware, wall plates, hook and hook rail products, and picture hanging accessories. This segment also includes decorative indoor and outdoor lighting fixtures, ceiling fans, landscape lighting and LED lighting systems.
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