2023-06-28 08:48:43 ET
Advanced Drainage Systems ( NYSE: WMS ) on Wednesday was downgraded to Equal-weight from a previous investment rating of Overweight by analysts at financial-services firm Morgan Stanley. They said shares in the maker of corrugated pipe have become less attractive after rallying since March.
“Following the recent run in shares, in our view Advanced Drainage ( WMS ) has rerated to more reasonable valuation levels and we see less upside to the multiple from here,” Joshua C. Pokrzywinski, analyst at Morgan Stanley, said in a June 28 report. “While Advanced Drainage ( WMS ) is still trading at a discount to each of its respective peer groups, it's trading towards the high end relative to history and is above its long-term average discount across each of these groups.”
Morgan Stanley raised its price target on Advanced Drainage ( WMS ) to $114 a share from $107 a share previously, based on a multiple of 12.5 times next-12-month EBITDA of $828 million.
“We would become more constructive with line of sight into margin catalysts, a non-residential trough or cyclically depressed valuation,” according to the report.
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Advanced Drainage Systems downgraded to Equal-weight at Morgan Stanley