Factors Setting the Tone for Masco (MAS) This Earnings Season
Masco Corporation MAS is scheduled to report first-quarter 2021 results on Apr 28, before the opening bell.
In the last reported quarter, the company’s top and bottom lines beat the Zacks Consensus Estimate by 2.9% and 1.4% as well as improved 13% and 36.4% year over year, respectively. Notably, earnings surpassed the consensus mark in each of the trailing five quarters.
Trend in Estimate Revision
The Zacks Consensus Estimate for Masco’s first-quarter earnings is pegged at 66 cents per share, implying growth of 43.5% on a year-over-year basis. The consensus estimate for revenues is $1.83 billion, indicating 15.6% year-over-year increase.
Masco Corporation Price and EPS Surprise
Masco Corporation price-eps-surprise | Masco Corporation Quote
Factors to Note
Masco’s first-quarter revenues are likely to reflect robust performance of Decorative Architectural Products and Plumbing Products segments. However, weakness in international and DIY paint markets might have weighed on its to-be-reported quarter’s performance.
The Zacks Consensus Estimate for Plumbing Products’ sales of $1,131 million indicates an 18.4% year-over-year improvement. The same for adjusted EBITDA is currently pegged at $216 million, which implies an increase of 20.7% from $179 million in the year-ago period. The segment has been benefiting from its portfolio expansion. In fourth-quarter 2020, Masco executed three bolt-on acquisitions, which might have contributed to its first-quarter 2021 top-line performance.
The consensus mark for the Decorative Architectural Products segment’s sales is currently pegged at $700 million, implying an 11.8% year-over-year increase. The same for adjusted EBITDA is pegged at $122 million, pointing to an increase of 14% from the prior-year period.
Notably, the business is highly focused on repair and remodeling activities. It has been enhancing the existing portfolio via regular inorganic moves, which allow the company to carry out operational improvements, improve go-to-market capabilities, and remove cyclical as well as lower-performing businesses.
The Repair and Remodel industry has been attractive with favorable fundamentals. Masco has been on the leading edge of the large millennial cohort forming households. With an increase in the desire for more enjoyable living space post the COVID-19 outbreak, home demand and remodeling expenditures witnessed a rise. The North American repair and remodel market is likely to have performed well in the quarter to be reported.
The company’s market leading brands, innovation, customer centric approach, strong free cash flow and capital deployment might aid first-quarter results.
What the Zacks Model Unveils
Our proven model predicts an earnings beat for Masco this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Currently, it has a Zacks Rank #3 and an Earnings ESP of +6.76%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Other Stocks Worth a Look
Here are some other companies in the Zacks Construction sector, which according to our model have the right combination of elements to post an earnings beat in their respective quarters to be reported.
Louisiana-Pacific Corporation LPX has an Earnings ESP of +11.75% and sports a Zacks Rank #1.
PotlatchDeltic Corporation PCH has an Earnings ESP of +1.56% and sports a Zacks Rank #1.
U.S. Concrete, Inc. USCR has an Earnings ESP of +51.22% and a Zacks Rank #1.
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