Update shared on17 Oct 2025
Fair value Increased 0.61%Zurn Elkay Water Solutions' analyst price target has been revised upward by $0.29 to $47.43. Analysts cite robust demand trends, solid growth prospects, and confidence in sustained performance as reasons driving the positive adjustment.
Analyst Commentary
Recent analyst reviews have provided insight into both the opportunities and challenges ahead for Zurn Elkay Water Solutions, with price target increases reflecting confidence in the company's future performance. The feedback from recent investor meetings has been summarized under key themes.
Bullish Takeaways
- Strong demand trends are fueling confidence in Zurn Elkay's ability to achieve near-term estimates and maintain core business momentum into 2026.
- Significant growth of the Elkay drinking water platform continues to be a key driver and is supporting robust earnings and cash flow expansion.
- Analysts are optimistic about the company's operating leverage, which is expected to drive further margin expansion and enhance profitability.
- With substantial cash reserves, Zurn Elkay is viewed as well positioned to pursue its M&A strategy and potentially amplify both scale and shareholder value.
Bearish Takeaways
- While analysts are largely optimistic, some note that the company's valuation appears relatively high compared to peers, which could temper upside potential.
- The sustainability of double-digit earnings and cash flow growth may be challenged if demand trends slow or if execution risks emerge.
- Greater project visibility across end markets is desirable because areas of uncertainty remain around the pace and consistency of customer orders.
What's in the News
- Repurchased 972,619 shares between April 1 and June 30, 2025, completing a total buyback of 21.2 million shares. This represents 14.27% of shares outstanding since 2015 (Key Developments).
- Raised 2025 full-year outlook, with core sales growth expected to be at least 5% year over year (Key Developments).
- Provided third-quarter 2025 guidance, projecting core sales growth to match the growth rate from the second quarter (Key Developments).
Valuation Changes
- Fair Value: Increased slightly from $47.14 to $47.43, reflecting a modest upward adjustment in analyst expectations.
- Discount Rate: Marginally decreased from 8.23% to 8.23%, indicating nearly unchanged risk assessment.
- Revenue Growth: Edged up from 5.14% to 5.14%, signaling a minor increase in projected topline expansion.
- Net Profit Margin: Decreased very slightly from 14.23% to 14.23%, showing minimal change in profitability outlook.
- Future P/E: Increased modestly from 36.05x to 36.27x, suggesting a slightly higher valuation relative to future earnings.
Disclaimer
AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.