(MAS) Masco Corporation – Bear of the Day

Masco Corporation (MAS) is highly dependent on the U.S. housing industry. Falling prices have made homes a less lucrative investment to buyers, which reduces demand for Masco products. Rising prices of raw materials are also affecting margins to a large extent.

In addition, Masco is vulnerable to unfavorable currency fluctuations due to its extensive international presence. The company’s high dependency on a few individual customers offers little room for margin expansion. In the most recent quarter, the company reported a loss of $0.05 per share, which was wider than the Zacks Consensus Estimate for a loss of $0.03.

Our long-term Underperform recommendation on the stock indicates that it will perform below the overall market. Our $11 target price, 52.4x our 2011 EPS estimate, reflects this view.

MASCO (MAS): Free Stock Analysis Report

Zacks Investment Research

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