UBS starts Core&Main at Buy, sees growth picking up

Investing.com -- UBS initiated coverage of Core&Main Inc with a Buy rating and a price target of $65, saying the recent pullback in the stock offers an attractive entry point as growth accelerates into 2026.

The brokerage expects Core&Main’s sales to grow at an annual rate of about 8% through fiscal 2027, driven by improving residential and non-residential construction activity and firmer pricing trends.

That compares with consensus expectations of about 4% sales growth.

UBS said near-term concerns about operating cost inflation are “overblown” and expects the company to expand its EBITDA margins by more than 50 basis points annually over the next two years.

It forecasts adjusted EBITDA of $1.19 billion in FY27, ahead of both market and consensus estimates.

The bank pointed to signs of improving demand in the U.S. housing market and expects a rebound in non-residential construction in 2026–2027, supported by stimulus measures and tax incentives.

UBS values the stock at 12 times FY27 EBITDA, in line with its historical average, and sees a roughly 27% upside from current levels.

"Despite the recent pullback in the stock, we have already seen early signs of improvement in residential&non-residential end market activity coupled with improved pricing trends which together setup an attractive runway moving into 2026," analysts said.

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