Mueller Water raises growth outlook after strong Q2
Published May 10th, 2018
Mueller Water shares closed up 11.2% earlier this week on the back of a better than expected set of second-quarter results, which showed net sales up 16.8% to $233.2 million, and operating income up 34.7% to $31.8 million.
At the same time, management felt sufficiently confident to raise the full-year net sales growth outlook to 7-9%, up significantly from the previous range of 4-7% given as recently as February this year.
The company was able to partially offset a rapid rise in brass and scrap metal costs through higher product pricing and productivity gains, and foresees residential construction growth in the mid- to high single digits and municipal spending growth in the low to mid-single digits.
Despite the lack of progress towards profitability in the Technologies division, the stock remains buoyant.
“[O]ur positive investment thesis remains unchanged. MWA shares represent tremendous value in our opinion,” wrote Janney analyst Michael Gaugler.