Armstrong World Industries (AWI) PT Raised to $190 at Jefferies

Jefferies analyst Philip Ng raised the price target on Armstrong World Industries (NYSE: AWI) to $190.00 (from $173.00) while maintaining a Hold rating.

The analyst comments "Steady outlook for 2H. AWI delivered strong results across MF & AS even in a fairly muted market environment, amid ongoing macro uncertainty. The slightly higher FY26 growth outlook was mostly driven by the 2Q beat, primarily in AS, while the guide assumes the 2H outlook remains consistent with initial expectations. Mgmt stressed there were no one-time items that helped 2Q26. MF vols were a bright spot (+2%), and the guide implies growth in 2H. Heading into the busier 3Q period for education, encouragingly mgmt noted it's expecting a normal season. AS org growth also accelerated against a tough comp. Following its 4th consecutive quarter of DD% order intake growth, mgmt was confident in the ~high-teens% outlook for 2H, which provides visibility into 2027. Transportation, data centers, HC driving strength. AWI called out pockets of strength in transportation, data centers, and healthcare, emphasizing good activity across both new construction and R&R. New wins this quarter at San Antonio International and the Ohio DOT add to the growing transportation pipeline. AWI is expanding its scope in data centers, moving from a frontoffice focus into a structural grid & containment (WAVE) offering to better serve this fast-growing vertical. Within data centers, AWI's project quoting & intake is up >50% YOY, driven by the broader solution set & targeting selling through its national accounts program. Lastly, TI & smaller R&R projects appear to be seeing some recovery, with home centers up ~9% YOY, though the channel can be lumpy. AUV benefitting from large project trends. Outperformance at the high end of the portfolio (e.g. SWAT) continues to drive AUV gains. We expect a modest acceleration in 2H as Aug pricing flows through and mix continues contributing. Mgmt noted fewer, but higher value, projects across verticals & the increased focus on commercial initiatives targeting these projects. Vols, AUV, and margins are likely benefitting from trends favoring larger projects, which play to AWI's strengths as a national player with a broad product portfolio. Full-year inflation assumptions (+MSD%) are unchanged, though freight is coming in heavier (+mid-teens%) than expected. Overall, the guide implies 2H margin improvement in both segments driven by steady execution, vol leverage, & price/ mix building. Capital allocation priorities unchanged. The increased buyback authorization (+$800 mil) is not a signal of any shift in strategy, and mgmt plans to remain opportunistic on repurchases. Org investments & strategic M&A are still the top priorities, and there's plenty of runway with M&A as AWI expands products and capabilities. AWI has a solid pipeline, but timing of deals can be choppy, and the company can flex buybacks to balance."

You May Also Be Interested In

• Freedom Broker Downgrades Flexsteel (FLXS) to Hold
• Outlook Therapeutics Inc. (OTLK) PT Lowered to $4 at Brookline Capital Markets
• DeFi Technologies (DEFT) PT Lowered to $1 at Benchmark Following Q2 Miss