Advanced Drainage Systems Delivered 'Impressive' Fiscal Q2 Results Amid Tepid Markets, RBC Says

MT Newswires Live11-08

Advanced Drainage Systems (WMS) posted an "impressive" fiscal Q2 beat and raise despite tepid markets, RBC Capital Markets said in a note emailed Friday.

The investment firm said the company delivered a "much stronger-than-expected" fiscal Q2 EPS of $1.97 compared with RBC's $1.55 forecast and the $1.64 Street estimate.

RBC also highlighted the fact that the company posted a 17% year on year increase in adjusted earnings before interest, taxes, depreciation, and amortization with "broad-based upside across its segments and continued positive price/cost contributions."

Additionally, despite some worries about more declines in the company's businesses exposed to the residential sector, Advanced Drainage's management was able to reaffirm the end-market outlook that was first released in July, the note said.

However, the company also kept a "cautious view" for H2, noting that "results still hinge on volumes amid tepid demand and seasonality risks (winter in northern US)," RBC said.

RBC lifted Advanced Drainage's price target to $168 from $158 and kept the company's outperform rating.

Price: 148.13, Change: +1.55, Percent Change: +1.06

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