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Barclays Analyst Boosts Price Target for Advanced Drainage Systems by 6.9%

By Don Francis, Editor
May 18, 2024 10:32 AM UTC
Barclays Analyst Boosts Price Target for Advanced Drainage Systems by 6.9%

Barclays's Matthew Bouley raised their price target on Advanced Drainage Systems (NYSE: WMS) by 6.9% from $189 to $202 on 2024/05/17. The analyst maintained their Strong Buy rating on the stock.

In an assessment of Advanced Drainage Systems' 2024/05/16-dated Q4 and FY 2024 earnings report, Bouley highlighted that the quarters' strong margins were driven by good volume acceleration, manufacturing productivity, and a favorable mix. The analyst called management's outlook "somewhat conservative."

Advanced Drainage Systems reported impressive financial results for the fourth quarter of 2024. The company recorded earnings per share (EPS) of $1.23, surpassing the Zacks Consensus Estimate of $0.95 and the previous year's Q4 earnings of $1.12 by 9.8%. Revenue for the quarter stood at $653.8 million, beating the Zacks Consensus Estimate of $620 million and representing a 5.9% increase compared to Q4 2023. Additionally, the company reported EBITDA of $191.2 million, marking an 11.2% year-over-year increase.

For the full fiscal year 2024, Advanced Drainage Systems achieved an EPS of $6.39, reflecting a 3.7% growth compared to the previous year. Despite a 6.4% decline in revenue to $2.87 billion, the company managed to improve its EBITDA by 2.1% to $922.9 million. Capital expenditures also increased by 10.1% to $183.81 million.

Looking ahead, management provided guidance for FY 2024, projecting revenue between $2.925 billion and $3.025 billion, EBITDA ranging from $940 million to $980 million, and capex in the range of $250 million to $300 million. President & CEO Scott Barbour expressed confidence in the company's performance, stating that the focus on highly engineered solutions positions Advanced Drainage Systems as a pivotal player in water management.

In addition to Barclays's Matthew Bouley, other analysts also updated their ratings for Advanced Drainage Systems on 2024/05/17. Stephens & Co.'s Trey Grooms raised their price target by 6%, from $182 to $193, and maintained their Strong Buy rating on the stock. Similarly, KeyBanc's Jeffrey Hammond raised their price target by 5.4%, from $185 to $195, and maintained their Strong Buy rating. Baird's Michael Halloran increased their price target by 4.2%, from $192 to $200, while maintaining a Buy rating.

The consensus among top-rated analysts is overwhelmingly positive, with 100% rating Advanced Drainage Systems as a Strong Buy or Buy. No analysts see the stock as a Hold, and no analysts recommend or strongly recommend selling.

Analysts project that Advanced Drainage Systems will deliver earnings per share (EPS) of $7.63 for the upcoming year. If their forecasts hold true, this would represent a significant 17% increase in EPS on a year-over-year basis.

Since the release of Advanced Drainage Systems' latest quarterly report on 2024/05/16, the stock price has risen by 1%. Over the past year, the stock has surged by an impressive 96.4%, outpacing the S&P 500, which has grown by 27.5%.

Barclays analyst Matthew Bouley has built a solid reputation as one of Wall Street's top analysts. Ranked in the top 1% out of 4,587 analysts by WallStreetZen, Bouley boasts an average return of 20.2% and an impressive win rate of 67.2%. Specializing in the Real Estate and Consumer Cyclical sectors, among others, Bouley's insights carry considerable weight in the financial community.

Advanced Drainage Systems Incorporated, headquartered in Hilliard, Ohio, is a leading manufacturer of thermoplastic corrugated pipes and related water management products. The company offers a range of drainage solutions used in underground construction and infrastructure both in the US and internationally. Their product portfolio includes single, double, and triple wall corrugated polypropylene and polyethylene pipes, plastic leachfield chambers and systems, EZflow synthetic aggregate bundles, mechanical aerated wastewater solutions, septic tanks and accessories, and combined treatment dispersal systems. With a history dating back to 1966, Advanced Drainage Systems has established itself as a key player in the water management industry, providing advanced sustainable solutions for protecting and managing water resources.

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