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Investing.com - Noble Capital has raised its price target on AZZ Inc . (NYSE:AZZ) to $125.00 from $112.00 while maintaining an Outperform rating on the stock. According to InvestingPro analysis, AZZ currently trades at an attractive P/E ratio of 12.3x and shows signs of being undervalued based on its Fair Value estimates.
The price target increase follows AZZ’s fiscal year 2026 first quarter results, which showed adjusted net income increasing by 22.8% compared to the prior year period.
Noble Capital noted that fiscal year 2026 is "off to a strong start" for the company, according to its analysis of the quarterly performance.
The research firm believes AZZ is well positioned to sustain increasing sales and margins while continuing to grow its market share.
Noble Capital also highlighted AZZ’s potential to generate significant free cash flow as part of its investment thesis for maintaining the Outperform rating.
In other recent news, AZZ Incorporated reported its Q1 FY2026 financial results, revealing a notable earnings per share (EPS) of $1.78, which surpassed the forecasted $1.56, resulting in a 14.1% surprise. However, the company’s revenue fell short of expectations, coming in at $422 million against the projected $433.45 million. Despite the revenue miss, AZZ highlighted strong cash flow generation, with $314.8 million from operations, and a significant improvement in its net leverage ratio from 2.8x to 1.7x. The company also announced the acquisition of Canton Galvanizing in Ohio, which is expected to be immediately beneficial and contribute to the expansion of its galvanizing business.
On the strategic front, AZZ continues to focus on strategic acquisitions and operational efficiencies to bolster its market position. The company has projected FY2026 sales between $1.625 billion and $1.725 billion, with adjusted EBITDA guidance ranging from $360 million to $400 million. Analyst notes from firms like Baird and Thompson Davis indicate a positive outlook for AZZ, with expectations of continued growth driven by infrastructure-related demand and strategic initiatives. Additionally, AZZ’s board approved an increase in its quarterly cash dividend by 17.6%, reflecting confidence in its financial health and future prospects.
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