Stephens Starts Advanced Drainage Systems (WMS) at Overweight, 'Long Runway for Secular Growth'

Stephens analyst Troy Grooms initiates coverage on Advanced Drainage Systems (NYSE: WMS) with a Overweight rating, PT $148.00.

The analyst comments "We're launching coverage on WMS with an OW rating and a $148 price target. WMS is the leading thermoplastic pipe manufacturer and will continue to benefit from secular trends as plastic takes share from traditional materials, driven by superior performance, competing product inflation, and WMS's efforts to drive conversion. In the nearterm, volume will likely decline from lower nonresidential and residential construction, but we believe this market weakness is appropriately reflected in the stock and residential demand appears to have troughed. The company has a long track record of outperforming end-market demand. Pricing gains over the last few years should hold, which combined with cost relief from raw material deflation and a return to more lower-cost recycled resins, should result in price-cost favorability and continued margin improvement. Longer term, we see margin expansion opportunity from improved manufacturing and distribution efficiencies. As a result, we're initiating coverage with an OW rating."

For an analyst ratings summary and ratings history on Advanced Drainage Systems click here. For more ratings news on Advanced Drainage Systems click here.

Shares of Advanced Drainage Systems closed at $125.24 yesterday.

You May Also Be Interested In

• Raymond James Starts SpyGlass Pharma (SGP) at Outperform
• KinderCare Learning Companies (KLC) PT Lowered to $4.50 at UBS
• Freedom Broker Upgrades Lifeway Foods (LWAY) to Buy