MAS - Embedded Expectations Analysis - 2021 04 09
Masco Corporation (MAS:USA) currently trades near historical averages relative to UAFRS-based (Uniform) earnings, with a 16.8x Uniform P/E. At these levels, the market has bearish expectations for the firm, and management may have concerns about their acquisitions, growth targets, and inflation headwindsSpecifically, management may be overstating the potential of their Easy Sanitary Solutions (ESS) acquisition and the strength of their recently acquired Elder & Jenks brand. In addition, they may lack confidence in their ability to fully capitalize on the resurgence in DIY paint demand, gain market share in complementary product categories, and meet their growth targets in the North American repair and remodel market. Furthermore, they may have concerns about their revenue growth mix in international markets, continued employee capacity restrictions at their Mexican facilities, and increases in year-end program costs. Finally, they may lack confidence in their ability to sustain Plumbing segment sales growth, see further Moody's credit rating upgrades, and mitigate raw material inflation headwinds
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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