MasterBrand Upgraded To Buy: Analyst Anticipates EBITDA Growth And Strong Housing Market Impact

Loop Capitals Markets analysts Garik Shmois and Jeffrey Stevenson upgraded MasterBrand Inc MBC to Buy from Hold at an increased price target of $13 from $9.
The analysts are upbeat about the company on strong Q1 beat and increased 2023 guidance.
Yesterday, the company reported Q1 2023 revenues of $676.7 million, beating the consensus of $629 million and adjusted EPS of $0.28, exceeding the consensus of $0.12.
MBC raised the midpoint of the 2023 adjusted EBITDA outlook by $10 million to $315 million to $345 million, with expected margins of 11.5-12.5%. The company expects net sales to decline in mid-teens Y/Y (vs Loop Capital's expectations of low to mid-teens).
The analysts expect the EBITDA margin to increase on favorable price/cost and improved execution of strategic initiatives. They project a solid new housing market to curb the impact of incremental weakness in retail.
The analysts raised expectations for Q2 2023 EBITDA to $90 million (+$6 million) and 2023 EBITDA to $335 million (+$20 million). They project an EBITDA margin of 12% and sales of $2.79 billion for 2023.
Price Action: MBC shares are trading higher by 15.5% at $9.98 on the last check Wednesday.

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