Deutsche Bank Downgrades Masonite International Stock Rating, Increases Price Target
Deutsche Bank has issued a new rating for Masonite International, downgrading the stock from Buy to Hold. However, the bank has increased the price target from $115 to $133. This adjustment follows the recent agreement between Owens Corning and Masonite, which has garnered a positive reaction from the market.
The analyst behind the rating revision noted that the benefits of this agreement are particularly promising for Masonite shareholders. As a result, the stock value is expected to align with market expectations of an improvement in Repair and Remodel (R&R) activities. It is worth noting that Masonite’s stock had been negatively impacted by the acquisition of PGT Innovations, but even after the deal fell through, the stock’s rise was only marginal.
On the other hand, concerns for Owens Corning are centered around the appropriateness of the acquisition risk and the potential value it can generate for its shareholders. Owens Corning’s potential value creation lies in several areas, including improvements in R&R, new construction, recovery in the UK business, and the Architectural business, which is currently under strategic review.
The revised price target for Masonite is based on 8.7 times the firm’s next twelve months EBITDA estimates. At present, Masonite International has a market capitalization of $2.85 billion and is trading at a P/E ratio of 18.13. While the company has experienced a slight revenue decline over the last twelve months, it has maintained a robust gross profit margin of 23.1%. Masonite’s stock price has seen an impressive surge, with a 42.81% return over the last week, and is currently trading near its 52-week high.
For investors interested in a more in-depth analysis of Masonite’s financials and stock performance, InvestingPro offers additional tips that can guide investment decisions.
Analyst comment
Positive news. As a result of the agreement with Owens Corning, Masonite’s stock rating has been downgraded but with an increased price target. The benefits of the agreement are promising, leading to an expected improvement in Repair and Remodel activities. Masonite’s stock price has seen a significant surge and is currently trading near its 52-week high. The market reaction is positive, and the stock value is expected to align with market expectations.
