Barclays maintains Mueller Water Products at Underweight, lowers price target to $24 from $25

Xylem (NYSE:XYL) and four other water infrastructure stocks reported Q3 earnings. Xylem missed revenue estimates by 3.5% with a 3% YoY decline, while Watts Water (NYSE:WTS) beat estimates by 5.2% with 19% YoY growth. The sector saw a 6.2% revenue miss overall and a 2.6% average stock decline post-earnings. Xylem's stock fell 9.6%, while Watts Water traded sideways, and Mueller Water (NYSE:MWA) rose 1.4%.

Mueller Water Products reported FY2026 net sales of $1.475B, up from $1.430B in FY2025, with adjusted EBITDA rising to $372.2M. Adjusted net income per diluted share increased to $1.57, and free cash flow was $207.3M. The company updated its investor presentation with these results, including non-GAAP metrics.

Mueller Water Products (MWA) reported Q4 net sales of $376.5M, down 1.1% YoY, with adjusted EBITDA up 4.0% to $95.5M. The company expects an annualized EBITDA margin benefit of 100-140 basis points from Q2. For 2027, MWA forecasts net sales of $1.44B-$1.47B and adjusted EBITDA of $378M-$388M, with a midpoint EBITDA margin of 26.3%. Free cash flow was $207.3M in 2026, and the company increased its repurchase authorization by $300M and raised its dividend by 14.3%.

Mueller Water Products (MWA) reported record full-year results for 2026. CEO Paul McAndrew announced the transition of the metering business to Zena USA, expecting an annualized adjusted EBITDA margin benefit of 100-140 basis points (about $8 million) starting in Q2 2027, with $26 million in one-time expenses in 2027. The company guided to an 110 basis point adjusted EBITDA margin expansion for 2027, driven by portfolio optimization, higher pricing, and operational improvements.

Mueller Water (MWA) reported Q4 2026 earnings with $207M in free cash flow, returning $74M to shareholders. The company increased its share repurchase authorization by $300M and raised its quarterly dividend by 14.3%. Mueller also announced plans to transition its metering business to Zenner USA, expecting $26M in one-time expenses and a 100-140 basis point EBITDA margin expansion. Q4 net sales decreased 1.1% YoY, but gross margin expanded 20 basis points.

Mueller Water Products reported Q4FY26 adjusted EBITDA up 14.1% to $372M, with full-year sales rising 3.2% to $1.5B. The company exited its metering unit, expecting $8M annualized EBITDA benefit. FY27 guidance: sales $1.44B-$1.47B (below consensus), EBITDA $378M-$388M. The company increased share buyback authorization by $300M and raised its dividend by 14.3%.