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Investing.com - RBC Capital has raised its price target on Advanced Drainage Systems (NYSE:WMS) to $168.00 from $158.00 while maintaining an Outperform rating. This target sits at the higher end of the analyst range of $155-$176, with the stock currently trading at $146.74. According to InvestingPro data, analysts maintain a strong consensus Buy recommendation on the drainage solutions provider.
The drainage solutions company reported strong fiscal second-quarter 2026 results, delivering 17% year-over-year adjusted EBITDA growth with broad-based upside across all segments and continued positive price/cost contributions. The company’s last twelve months EBITDA stands at $860.76 million, with a healthy gross profit margin of 38.19%.
Despite industry concerns about potential declines in residential-exposed businesses, particularly following CNM’s September 2025 guidance cut citing residential weakness, Advanced Drainage management reiterated its end-market outlook first issued in July 2025.
The company maintained its cautious view for the second half of fiscal 2026, emphasizing that results still depend on volumes amid tepid demand and seasonality risks, particularly winter conditions in the northern United States.
RBC Capital noted that Advanced Drainage’s operational execution remains strong, supported by stable pricing, material cost tailwinds, and strategic alignment efforts.
In other recent news, Advanced Drainage Systems reported its second-quarter earnings for fiscal year 2026, exceeding analyst expectations. The company achieved an earnings per share of $1.97, surpassing the projected $1.64, which represents a 20.12% surprise. Revenue also outperformed forecasts, reaching $850 million compared to the anticipated $802.54 million. Following the earnings report and conference call, KeyBanc raised its price target for Advanced Drainage Systems from $159 to $170, maintaining an Overweight rating. The price target adjustment came after the company addressed market concerns about challenging end markets and pricing issues. These developments highlight the company’s ability to navigate current market conditions effectively.
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