This is our first report on Masco Corporation, a major global player involved in the design, manufacture and distribution of home improvement and building products. Masco witnessed a weak Q4 and failed to meet Wall Street expectations in terms of earnings as a result of lower volumes in most categories in Q4. This was largely offset by 9% in pricing moves. Its quarterly profit per share was $0.65. Plumbing increased by 2% in local currency, with a 7% increase in overseas plumbing offsetting a 1% fall in North American plumbing. Their international business has maintained excellent performance. While Pro paint continues to perform well with mid-single-digit growth against a comp of over 50%, DIY paint sales fell by low double digits. Decorative Architecture saw 6% growth throughout the entire year. Over the year, DIY paint saw low single-digit growth, while professional paint saw over 25% growth. Pro Paint has had phenomenal 3-year growth of almost 70% and currently represents over $900 million. They intend to continue investing in their paint business to increase their market share in the DIY and professional segments. Besides that, their adjacent paint categories have done well, including aerosols, interior stains, caulks, and sealants. We initiate coverage on the stock of Masco Corporation with a ‘Hold’ rating.
Our Report Structure:
⦁ Company Overview
⦁ Investment Thesis
⦁ Key Drivers
⦁ Historical Quarterly Statement Analysis – Income Statement & Cash Flows
⦁ Historical Quarterly Balance Sheet Analysis
⦁ Historical Annual Financial Statement Analysis
⦁ Analysis Of Key Financial Ratios
⦁ Financial Forecasts For 3 Years
⦁ Forecasting The Capital Structure & Net Debt
⦁ Discounted Cash Flow Valuation
⦁ Trading Multiples
⦁ Key Risks
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