Core & Main’s (NYSE:CNM) stock is poised for gains after the company reported better-than-forecast results that defy weak investor sentiment toward the distributor of water, sewer and fire-protection products, analysts at Baird said in a report.
Funding for public works from the Infrastructure Investment and Jobs Act is supportive for sales and profit gains, according to the report.
“Investor sentiment remains bearish on weak residential and weakening non-residential markets, but IIJA funding should offset [weakness], and municipal [spending] should also have upside after decades of underinvestment,” David Manthey, analyst at Baird said in a March 28 report. “Net, we see very good upside to Core & Main (CNM) at current levels.”
Baird raised its price target on Core & Main (CNM) to $33 a share from $29 a share, based on an enterprise value-to-EBITDA multiple of 10 times estimated EBITDA for 2024. Baird also raised its earnings estimates for the company.
Core & Main’s (CNM) stock has fallen 8.9% in the past 12 months through March 28, compared with a 10% decline for the Standard & Poor’s 400 midcap stock index (SP400).
Baird’s estimates for Core & Main Inc. (CNM), March 28 Fiscal EPS New Old 2023 $2.00 $1.89 2024 $2.11 $1.85