Tag: AZZ Inc.

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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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. 

Monday, August 21, 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.

AZZ Inc. is North America’s largest independent hot-dip galvanizing and coil coating solution company. AZZ has two operating divisions – Metal Coatings and Precoat Metals. Metal Coatings provides a wide range of high-quality metal finishing and coating services that protect from the destruction of metallic corrosion including galvanizing and other forms of coating and plating. Precoat Metals is engaged in the growing use of coil coated metal, often referred to as prepainted metal because the metal is painted prior to, rather than after, fabrication. 

The shares of AZZ trade at a sharp discount to other coating companies. We believe the discount also reflects a more leveraged balance sheet following recent acquisitions. Positive free cash flow will allow the company to pay down debt. As the company deleverages, we believe it will see valuation multiples rise to levels approaching peer companies.

Get the Full Report

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.