12:00 PM EDT, 07/16/2024 (MT Newswires) -- Zurn Elkay Water Solutions ( ZWS ) remains set to see growth, driven by technology-led market share gains and solid demand from institutional customers outside residential areas, Oppenheimer said in a note Tuesday.
Analysts, including Bryan F. Blair, said that with Zurn Elkay's improved profitability in its drinking water segment and ongoing secular trends, the company is well-positioned for double-digit earnings growth and strong cash flow generation in the years ahead.
Many investors see Zurn Elkay's approximately 27% exposure to commercial non-residential markets as a major challenge, the analysts said, adding that they expect "choppy/generally sluggish commercial demand over the coming quarters (consistent with recent past), albeit more than offset by institutional strength and incremental deal synergies."
The analysts said they have made a small adjustment to their projections, with estimated earnings before interest, taxes, depreciation, and amortization for 2024 to $378 million from $377 million previously.
Oppenheimer has an outperform rating and a $37 price target on the stock. Shares of the company rose nearly 4% in recent trading activity.
Price: 31.88, Change: +1.16, Percent Change: +3.78