DOOR - Embedded Expectations Analysis - 2018 10 12
Masonite International Corporation (DOOR:USA) currently trades at historical lows relative to UAFRS-based (Uniform) Earnings, with a 13.5x Uniform P/E, implying bearish expectations for the firm, and management has concerns about rising costs, growth in the U.K., and guidance targetsSpecifically, management is confident that they have to continue to deal with freight and logistics headwinds like they had to do with raw materials. Moreover, they may be concerned about continued increases in carrier rates and fuel costs due to a strong inflationary environment, and may lack confidence in their ability to sustain growth in their wholesale channel, and to smooth out their growth in the U.K. Furthermore, they may have concerns about their ability to sustain gross profit growth, high share buyback levels, and margin expansion due to increased efficiency and productivity levels. Additionally, they may be concerned about lower volumes due to a soft housing market in the U.K., and may lack confidence in their ability to sustain free cash flow performance.
Masonite International designs, manufactures and distributes interior and exterior doors for the new construction and repair, renovation and remodeling sectors of the residential and non-residential building construction markets. Co. manufactures a line of interior doors, including residential molded, flush, stile and rail, louver and commercial and architectural doors; door components for internal use and sale to other door manufacturers; and exterior residential steel, fiberglass and wood doors and entry systems. Co.'s portfolio of brands include Masonite®, Marshfield®, Premdor®, Mohawk®, Megantic®, Algoma®, Birchwood Best®, Lemieux®, Door-Stop™, Harring Doors™ and National Hickman™ .
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