The firm raised its price target on Masco's shares to $25 from $23.
Jefferies cited the recent pullback on the company's shares created an attractive buying opportunity.
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TheStreet Ratings team rates MASCO CORP as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate MASCO CORP (MAS) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, impressive record of earnings per share growth and compelling growth in net income. We feel these strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- MAS's revenue growth has slightly outpaced the industry average of 5.0%. Since the same quarter one year prior, revenues slightly increased by 4.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- MASCO CORP has improved earnings per share by 23.5% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, MASCO CORP turned its bottom line around by earning $0.83 versus -$0.16 in the prior year. This year, the market expects an improvement in earnings ($1.03 versus $0.83).
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Building Products industry and the overall market, MASCO CORP's return on equity significantly exceeds that of both the industry average and the S&P 500.
- The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Building Products industry average, but is greater than that of the S&P 500. The net income increased by 39.6% when compared to the same quarter one year prior, rising from $53.00 million to $74.00 million.
- The gross profit margin for MASCO CORP is currently lower than what is desirable, coming in at 30.13%. Regardless of MAS's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 3.76% trails the industry average.
- You can view the full analysis from the report here: MAS Ratings Report