Report
Valens Research

MAS - Embedded Expectations Analysis - 2021 01 13

Masco Corporation (MAS:USA) currently trades near historical averages relative to UAFRS-based (Uniform) earnings, with a 17.2x Uniform P/E. At these levels, the market has bullish expectations for the firm, but management may have concerns about cost reduction initiatives, their DIY business, and home spending demand

Specifically, management may lack confidence in their ability to maintain EPS and margin growth, sustain trade sales performance in North America, and execute their cost reduction initiatives. Management may also have concerns about the sustainability of home spending demand and the impact of the pandemic on their business. Moreover, they may be overstating the potential of brick-and-mortar store investments and the strength of their partnerships with customers. In addition, they may be exaggerating the potential of the DIY market among millennials and the popularity of their brands, particularly Kichler
Underlying
Masco Corporation

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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Valens Research
Valens Research

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