Citi raises Masco stock price target to $78 from $77

On Wednesday, Citi analyst Anthony Pettinari adjusted the price target for Masco Corporation (NYSE:MAS) shares, increasing it to $78.00 from the previous $77.00. Despite this change, the Neutral rating on the stock was maintained. Pettinari’s analysis followed Masco’s performance, which showed a flat trend after the company reported its fourth-quarter earnings and provided a mixed outlook for 2025. According to InvestingPro data, the company, currently valued at $16.67 billion, is trading near its Fair Value, with analyst targets ranging from $74 to $96 per share.

Masco’s guidance for its plumbing segment anticipates a 0-3% increase in top-line revenue, which is slightly below the consensus expectation of a 3% rise. This forecast takes into account potential sales and margin declines in the first half of the year, as demand continues to show variability. The company’s lower-ticket product mix is also expected to underperform to some extent. InvestingPro analysis shows Masco maintains strong financial health with a GOOD overall score, supported by a healthy gross margin of 36.31% and robust cash flows. For deeper insights into Masco’s financial metrics and growth potential, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro.

The analyst noted that recent tariffs are likely to affect second-quarter price and cost dynamics. However, Masco’s efforts to mitigate supply chain issues should start to show results later in the year, with the company anticipating a positive full-year price-to-cost scenario.

For the Decorative Architectural (D.A.) segment, year-over-year sales are projected to remain steady, excluding mergers and acquisitions. The expected margin expansion in the first half of the year is partly due to the divestiture of Kichler, which is margin-accretive. The Pro Paint sales guidance, predicting mid-single-digit growth, is based on an assumption of continued outperformance compared to the Do-It-Yourself (DIY) segment, which is experiencing a slower-than-expected recovery.

Pettinari highlighted several positive aspects, including stronger projected D.A. margins of 19.0-19.5% versus the 18.7% consensus, resilience in the Pro Paint category, favorable plumbing price-to-cost outcomes, and confidence in navigating tariffs. These factors, however, are seen as being counterbalanced by sluggish plumbing demand, indicated by a 1% volume decrease in the fourth quarter, tepid DIY Paint activity, and a premium valuation of the company at 12.3 times its next twelve months’ EBITDA compared to the approximate 5-year average of 11 times. InvestingPro data reveals additional strengths, including an impressive 11-year streak of dividend increases and consistent dividend payments for 55 consecutive years, with 8 more exclusive ProTips available to subscribers.

In other recent news, Masco Corporation disclosed its Q4 results, with earnings slightly surpassing expectations while revenues fell short. The home improvement and building products manufacturer reported adjusted earnings per share of $0.89, beating the consensus estimate of $0.88. However, revenue declined 3% year-over-year to $1.83 billion, missing the anticipated $1.84 billion.

In terms of segments, Plumbing Products net sales decreased 1% to $1.19 billion, while Decorative Architectural Products revenue fell 6% to $639 million, compared to the prior year quarter. For the full year 2024, Masco reported net sales of $7.83 billion, down 2% from 2023, and adjusted earnings per share rose 6% to $4.10.

Looking ahead, Masco provided a 2025 outlook with earnings per share projected between $4.20 and $4.45, exceeding the $4.09 analyst consensus. This forecast accounts for the impact of recent China tariffs. Masco’s CEO, Keith Allman, stated that they anticipate their sales to be approximately flat to up low-single digits when adjusted for divestitures and currency. These are among the recent developments for Masco Corporation.

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