Zurn Elkay Water Solutions (ZWS) is laying out a broader path for expansion after a strategic review identified $1 billion to $2 billion in adjacent market opportunities the company aims to pursue, RBC Capital Markets said Wednesday in a report.
The roadmap arrived alongside conservative 2026 guidance calling for mid-single-digit organic growth despite largely flat end markets, reflecting a steady demand backdrop across institutional, commercial, and waterworks channels, the report said.
Solid Q4 results on Tuesday included a 10% gain in organic sales and adjusted earnings before interest, taxes, depreciation and amortization coming in 2% above consensus, RBC said. Growth was broad-based across product categories, and margins improved from a year earlier, the report said.
Management expects 7% to 8% organic growth in Q1, helped by front-loaded pricing tied to late-2025 tariff adjustments, while incremental EBITDA margins of 35% are projected for both Q1 and the full year, in line with Wall Street expectations, the report said.
RBC raised its price target on Zurn Elkay stock to $55 from $49 and maintained its sector perform rating.
Price: 50.71, Change: -1.06, Percent Change: -2.05
Comments