Tag: AZZ Inc.

AZZ Inc. (AZZ) – Tempering Our Expectations; Rating Remains an Outperform

Posted on by cpereira@noblefcm.com


Friday, October 11, 2024

Mark Reichman, Managing Director, Equity Research Analyst, Natural Resources, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Second quarter financial results. For the fiscal year (FY) 2025, AZZ reported second quarter adjusted net income of $41.3 million or $1.37 per share compared to $37.2 million or $1.27 per share during the prior year period and our estimate of $40.8 million or $1.35 per share. AZZ maintained its FY 2025 sales guidance range of $1.525 billion to $1.625 billion, lifted the lower end of adjusted EBITDA to a range of $320 million (from $310 million) to $360 million, and increased adjusted diluted EPS expectations to a range of $4.70 to $5.10 from $4.50 to $5.00.

Updating estimates. We have lowered our 2025 EBITDA and EPS estimates to $343.0 million and $4.95, respectively, from $350.3 million and $5.00. Our estimates reflect seasonality in the second half of the year. Our 2026 EBITDA and EPS estimates have been reduced to $361.2 million and $5.45, respectively, from $366.8 million and $5.70. Our 2026 estimates reflect a slower ramp in revenue from the new facility under construction in Washington, Missouri.


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*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

AZZ Inc. (AZZ) – Second Quarter Financial Results Exceed Expectations

Posted on by cpereira@noblefcm.com


Thursday, October 10, 2024

Mark Reichman, Managing Director, Equity Research Analyst, Natural Resources, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Second quarter financial results. For the fiscal year (FY) 2025, AZZ reported second quarter adjusted net income of $41.3 million or $1.37 per share compared to $37.2 million or $1.27 per share during the prior year period and our estimate of $40.8 million or $1.35 per share. Adjusted EBITDA increased 4.4% to $91.9 million, roughly in line with our estimate, representing 22.5% of sales versus 22.1% of sales during the second quarter of FY 2024. While sales of $409.0 million were modestly below our $410.5 million estimate, AZZ generated a 25.3% gross margin as a percentage of sales compared to 24.4% during the prior year period and our estimate of 24.4%. AZZ maintained its FY 2025 sales guidance range of $1.525 billion to $1.625 billion, lifted the lower end of adjusted EBITDA to a range of $320 million (from $310 million) to $360 million, and increased adjusted diluted EPS expectations to a range of $4.70 to $5.10 from $4.50 to $5.00.

Debt reduction. During the first half of FY25, AZZ generated operating cash flow of $119.4 million and reduced debt by $45 million. Management expects to reduce debt by at least $100 million during the fiscal year compared to prior expectations of $60 million to $90 million. At quarter end, the company’s net leverage was 2.7x trailing twelve months EBITDA and cash and cash equivalents amounted to $2.2 million.


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This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

AZZ Inc. (AZZ) – Highlights from the Noble Virtual Basic Industries Equity Conference.

Posted on by cpereira@noblefcm.com


Thursday, September 26, 2024

Mark Reichman, Managing Director, Equity Research Analyst, Natural Resources, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

New manufacturing facility is on schedule and on budget. AZZ Inc. participated in Noble’s Virtual Basic Industries Conference on September 25. AZZ is the leading independent provider of hot-dip galvanizing and coil coating solutions to a broad range of end markets. With AZZ Precoat Metals’ new manufacturing facility in Washington, Missouri expected to be completed in fiscal year 2025, we expect the facility to contribute to top-line growth in fiscal year 2026 while capital expenditures decline. Approximately 75% of the facility’s production is already committed that we estimate could generate approximately $50 million to $60 million in revenue. A link to the presentation replay is here.

Declining debt balance and cost of capital. Based on the company’s strong first quarter fiscal year 2025 results and outlook, we have assumed AZZ will pay down $90 million of debt this fiscal year, or at the high end of the guidance range. On September 24, AZZ executed a fourth amendment to its existing credit agreement and reduced the interest rate of the Term Loan B by 75 basis points to the Adjusted Term Secured Overnight Financing Rate (SOFR) plus 250 basis points.


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This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

AZZ Inc. (AZZ) – Upgrading to Outperform Based on Strengthening Cash Flow Profile and Outlook

Posted on by cpereira@noblefcm.com


Tuesday, June 11, 2024

Mark Reichman, Managing Director, Equity Research Analyst, Natural Resources, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Upgrading our rating to Outperform. We have raised our investment rating to Outperform based on an increasingly favorable cash flow growth profile. With the new greenfield plant construction in Washington, Missouri expected to be completed in fiscal year 2025, we expect the facility to contribute to top-line growth while capital expenditures associated with organic growth initiatives could decline in fiscal year 2026. Once its effort to deleverage the balance sheet is complete, we think AZZ could more aggressively pursue acquisitions to enable the company to expand geographically and broaden its product and service offerings.

New manufacturing facility in Washington, Missouri. AZZ Precoat Metals’ new 250,000 square foot manufacturing facility is expected to contribute to earnings beginning in fiscal year 2026. Approximately 75% of the facility’s production is already committed that we estimate could generate approximately $60 million in revenue. We expect EBITDA margins to be at the high end of the company’s stated 17% to 22% range for the precoat metals segment.


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Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

AZZ Inc. (AZZ) – Fiscal 2024 4Q and year results meet expectations

Posted on by cpereira@noblefcm.com


Tuesday, April 23, 2024

Michael Heim, Senior Vice President, Equity Research Analyst, Energy & Transportation, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Seasonal decline was less due to warm weather. Precoat Metals reported strong results as construction sale benefitted from warm weather. Appliance sales were also strong.

Margins continue to improve steadily as increased sales are spread over fixed costs. Consolidated margins dipped slightly with the shift towards lower-margin Precoat Metal sales, but the overall trend continues to rise.


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Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

AZZ Inc. (AZZ) – AZZ raises guidance. We raised our numbers two weeks ago.

Posted on by cpereira@noblefcm.com


Tuesday, April 09, 2024

Michael Heim, Senior Vice President, Equity Research Analyst, Energy & Transportation, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

AZZ raised its FY 2025 guidance. Management increased its estimated sales, adjusted EBITDA, and adjusted diluted EPS by 15-20%. The increase incorporates a $4.5-$5.0 million reduction in financing costs due to the repricing of AZZ’s Term Loan B. It also reflects an expected improvement in results from AZZ’s partially spun off AIS division (40% owned and treated as other income). Management expects $15-$18 million of other income in FY 2025, up from the $13 million we have assumed for FY 2024 (reporting 4/22).

AIS growth reflects increased activity in the Electrical Infrastructure business units. Increased use of data centers, electric grid improvements, and general growth in manufacturing is leading to increased sales. We view higher results as sustainable and have raised our other income estimate for the years beyond FY 2025..


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Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

AZZ Inc. (AZZ) – Stock due for a pause after recent strength, rating lowered

Posted on by cpereira@noblefcm.com


Friday, March 22, 2024

Michael Heim, Senior Vice President, Equity Research Analyst, Energy & Transportation, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

We are lowering our rating on the shares of AZZ to Market Perform with the stock solidly above our price target. The shares of AZZ have risen sharply in recent months and now trade above our $75 price target. At current prices, the shares trade at 16 times our recently raised fiscal 2025 earnings estimate, a multiple similar to its peers. Our investment premise for the shares of AZZ had been that its multiples would expand as the company’s balance sheet improved. This has largely come true.

A Market Perform rating does not mean we think the stock wont continue to rise. The company continues to report favorable results and lay the foundation for future growth. Construction of a new factory is nearing completion and financing costs are decreasing. A recent debt refinancing is expected to reduce financing costs by $5 million allowing us to raise our fiscal 2025 earnings estimate. With sales growing at a 3-5% rate and margins rising with a shift towards AZZ’s Metal Coating business, we expect solid earnings growth over the next few years.


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Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

AZZ Inc. (AZZ) – AZZ releases fiscal 2025 guidance in line with expectations

Posted on by cpereira@noblefcm.com


Monday, February 05, 2024

Michael Heim, Senior Vice President, Equity Research Analyst, Energy & Transportation, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Management releases initial fiscal 2025 guidance. Management projects sales of $1.5-$1.6 billion (Noble est. $1.57b), adjusted ebitda of $300-$350 million ($345m), and adjusted diluted EPS of $4.25-$4.75 ($4.50). Guidance assumes $10-$12m of income from its unconsolidated subsidiary ($9.3m), capital expenditures of $100-$120m ($90m), and $60-$100m of debt deleverage ($40m). Management assumes working capital improvements which we have not assumed in our models. Management also reconfirmed fiscal 2024 guidance.

We are not changing our estimates, but will monitor the areas in which we differ with guidance. Our model projects estimates that at the high end of the range for sales and adjusted ebitda but below unconsolidated sub earnings, capital expenditures, and debt reduction. Given that our estimates are generally in line with guidance, we are not making changes at this time. Instead, we will monitor the discrepancies quarterly and make adjustments as needed.


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Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

AZZ Inc. (AZZ) – Estimates and target raised to reflect higher margins and peer group comps.

Posted on by cpereira@noblefcm.com


Thursday, January 25, 2024

Michael Heim, Senior Vice President, Equity Research Analyst, Energy & Transportation, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Fiscal third quarter results continued AZZ’s upward trend. AZZ reported strong results in the third quarter as sales continued to expand and operating margins increased. While there was a nonrecurring boost to AZZ’s nonconsolidated division, that should not take away from favorable results at AZZ’s Metal Coating and Precoat Metals divisions. We look for top-line growth to continue at a 2-3% rate and for EBITDA margins to continue to expand towards 25% with a continued shift toward the higher-margin Metal Coating division.

Coating company stocks have risen in recent months. The DJIA has risen 14% in the last three months. AZZ’s increase of 33% over that time period leads its coating peer group, but other stocks such as Chemours (CC) and Sherwin-Williams (SHW) have also risen more than 25%. As a result, the peer group median forward P/E has risen to 17 times from 15 times and the median EV/EBITDA has increased to 13 times from 10 times.


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Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

AZZ Inc (AZZ) – Improving margins lead management to bump up guidance

Posted on by cpereira@noblefcm.com


Thursday, January 11, 2024

Michael Heim, Senior Vice President, Equity Research Analyst, Energy & Transportation, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Sales grew as expected as we head into the slower, winter months. Sales in the most recent quarter rose 2.2% year over year with Metal Coatings sales increasing 3.1% and Precoat Metal sales growing 1.6%. Management cited a shift from plastic to aluminum material and tail winds from the 2021 Infrastructure Investment and Jobs Act.

Margins continue to improve with the shift towards Metal Coatings business and operational efficiencies. EBITDA margins grew to 22.6% of sales versus 18.5%. The improvement reflects operational efficiencies and higher growth for the higher margin Metal Coating business.


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Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

Release – AZZ Inc. to Present and Host Meetings at the 19th Annual Noble Capital Markets Conference on December 4, 2023

Posted on by aweinsoff@channelchek.com

Research News and Market Data on AZZ

28 Nov, 2023, 16:30 ET

Investor Presentation to be held at 1:00 p.m. Eastern Time

FORT WORTH, Texas, Nov. 28, 2023 /PRNewswire/ — AZZ Inc. (NYSE: AZZ) the leading independent provider of hot-dip galvanizing and coil coating solutions in North America, today announced that David Nark, Senior Vice President, Marketing, Communications, and Investor Relations, will present at the 19th Annual Noble Capital Markets Emerging Growth Equity Conference at the campus of Florida Atlantic University on Monday, December 4, 2023 at 1:00 p.m. ET. Investors interested in meeting with management may attend a breakout session scheduled immediately following the presentation or schedule a one-on-one meeting during the conference on December 4th or December 5th.

A high-definition video webcast of the presentation will be available the day following the event on the Company’s website at www.azz.com/investor-relations, on Noble Capital Markets’ Conference website at www.nobleconference.com and at www.channelchek.com the investor portal created by Noble. The webcast will be archived on each website for 90 days following the event.

AZZ’s management will host one-on-one investor meetings during the event. Investors interested in arranging one-on-one meetings should contact Amanda Weinsoff at aweinsoff@channelchek.com.

About AZZ Inc.

AZZ Inc. is the leading independent provider of hot-dip galvanizing and coil coating solutions to a broad range of end-markets. Collectively, our business segments provide sustainable, unmatched metal coating solutions that enhance the longevity and appearance of buildings, products and infrastructure that are essential to everyday life. For more information on AZZ Inc. please visit https://www.azz.com/about-us/.

Safe Harbor Statement

Certain statements herein about our expectations of future events or results constitute forward-looking statements for purposes of the safe harbor provisions of The Private Securities Litigation Reform Act of 1995. You can identify forward-looking statements by terminology such as “may,” “could,” “should,” “expects,” “plans,” “will,” “might,” “would,” “projects,” “currently,” “intends,” “outlook,” “forecasts,” “targets,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue,” or the negative of these terms or other comparable terminology. Such forward-looking statements are based on currently available competitive, financial, and economic data and management’s views and assumptions regarding future events. Such forward-looking statements are inherently uncertain, and investors must recognize that actual results may differ from those expressed or implied in the forward-looking statements. Forward-looking statements speak only as of the date they are made and are subject to risks that could cause them to differ materially from actual results. Certain factors could affect the outcome of the matters described herein. This press release may contain forward-looking statements that involve risks and uncertainties including, but not limited to, changes in customer demand for our products and services, including demand by the construction markets, the industrial markets, and the metal coatings markets. We could also experience additional increases in labor costs, components and raw materials including zinc and natural gas, which are used in our hot-dip galvanizing process; supply-chain vendor delays; customer requested delays of our products or services; delays in additional acquisition opportunities; an increase in our debt leverage and/or interest rates on our debt, of which a significant portion is tied to variable interest rates; availability of experienced management and employees to implement AZZ’s growth strategy; a downturn in market conditions in any industry relating to the products we inventory or sell or the services that we provide; economic volatility, including a prolonged economic downturn or macroeconomic conditions such as inflation or changes in the political stability in the United States and other foreign markets in which we operate; acts of war or terrorism inside the United States or abroad; and other changes in economic and financial conditions. AZZ has provided additional information regarding risks associated with the business, including in Part I, Item 1A. Risk Factors, in AZZ’s Annual Report on Form 10-K for the fiscal year ended February 28, 2023, and other filings with the SEC, available for viewing on AZZ’s website at www.azz.com and on the SEC’s website at www.sec.gov. You are urged to consider these factors carefully when evaluating the forward-looking statements herein and are cautioned not to place undue reliance on such forward-looking statements, which are qualified in their entirety by this cautionary statement. These statements are based on information as of the date hereof and AZZ assumes no obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise.

Investor Relations and Company Contact:
David Nark, Senior Vice President of Marketing, Communications, and Investor Relations
AZZ Inc.
(817) 810-0095
www.azz.com

Investor Contact:
Sandy Martin / Phillip Kupper
Three Part Advisors
(214) 616-2207
www.threepa.com

SOURCE AZZ Inc.

AZZ Inc. (AZZ) – Model Adjustments

Posted on by cpereira@noblefcm.com


Tuesday, October 24, 2023

Michael Heim, Senior Vice President, Equity Research Analyst, Energy & Transportation, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

We have updated our models to reflect reported August quarter financial results. We are fine tuning our models to reflect August quarter results. We have raised our sales projections modestly to reflect anticipated growth in the Precoat division in the February quarter, typically the weakest quarter for the company. We now project Precoat sales and overall sales in the fourth quarter of $195 million and $345 million, respectively.

We have trimmed margins a bit. We have lowered our gross margin and EBITDA margin assumptions for the third and fourth quarter. Our margin assumptions now show improvement over previous year results, but now allow for a decrease in margins in the winter quarters relative to the summer quarters to reflect lower sales.


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Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

AZZ Inc. (AZZ) – Sales a bit light, but margins are holding steady.

Posted on by cpereira@noblefcm.com


Thursday, October 12, 2023

Michael Heim, Senior Vice President, Equity Research Analyst, Energy & Transportation, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Sales growth stagnated. 2024-2Q sales decreased 1.9% (Metal Coatings up 2.4% and Precoat Metals down 5.0%) due to a soft market for precoated construction and appliances. Management remains optimistic that sales growth will resume pointing to rising new home startups and the AIIJ Act.

EBITDA margins held steady despite the sale decline. Metal Coatings maintained an EBITDA margin above 30% and Precoat Metals held its EBITDA margin near 20%. Importantly, the company has been making a concerted effort to reduce customer inventories. Lower inventories has helped reduce costs and improved cash flow leaving the company well positioned for seasonal sales declines during the winter months.


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Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.