CNM Stock Forecast & Price Target

Core & Main Inc. is projected to experience continued growth, with FY’25 EBITDA anticipated to increase by 3%, bolstered by a 4% year-over-year sales growth driven by a combination of organic volume and acquisitions. The company's total sales reached $2,038 million, reflecting an impressive 11.5% increase compared to the previous year, outperforming consensus estimates, with significant contributions from meter products, which saw a 24% increase due to smart meter adoption initiatives and acquisitions. Moreover, Core & Main's advantageous positioning in the water infrastructure market, combined with ongoing efforts to consolidate the fragmented industry, supports a positive outlook for sustainable EBITDA growth, enhanced margins, and consistent market share gains.

Core & Main Inc's adjusted EBITDA of $277 million, reflecting a margin of 13.6%, has decreased approximately 60 basis points from the previous year, largely due to increased selling, general, and administrative (SG&A) expenses. The gross margin of 26.6% has also declined by 40 basis points compared to the prior year, which could indicate weakening pricing power in a competitive landscape marked by factors such as deflation in PVC and ductile pipe products. Furthermore, the company faces risks associated with slowing public and private construction activity, which could lead to lower revenue growth, increased competitive pricing pressure, and shrinking margins.