Ahead Of The Bell: Masco Upgraded

HARTFORD, Conn. (AP) — Home improvement products manufacturer Masco Corp. is benefiting from an improving market and could boost business as a key distributor increases market share, an analyst said Tuesday.

Analyst Keith Hughes of SunTrust Robinson upgraded Masco to "Buy" from "Neutral." He initiated a price target of $18.

A "bottoming process is developing, particularly in U.S. renovation residential demand," which accounts for between 60 percent and 70 percent of the Taylor, Mich.-based company's revenue, and in construction activity, he wrote in a client note.

Furthermore, Hughes said the market also might be reaching a bottom in Europe, and Home Depot is showing signs of a resurgence in market share, benefiting Masco.

Following a severe decline among home builders that reduced Masco's products sold to homebuilders, it now has an improved mix of "big- and small-ticket renovation products," some of which will strengthen before homebuilding turns up strongly, Hughes said.

Hughes also said investors will be looking for information from the company at an analyst's day scheduled for Sept. 17 about long-term improvement or exits of cabinets and installation, two Masco businesses that have posted losses.

"Any incremental improvement in these areas could have an outsized effect on the stock," he said.