BRADY CORP (BRC): what the price assumes
In the published model solve dated 2026-Q2, anchored at $90.21, BRADY CORP (BRC) is priced for +7.1% growth. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-07-25.
Generated: 2026-09-07 · Exported: 2026-09-09 · Source: https://boothcheck.com/report/BRC
Headline
| Field | Value |
|---|---|
| Ticker | BRC |
| Company | BRADY CORP |
| Sector / Industry | Industrials |
| Current price | $90.21/sh |
| Composition | Safety and Facility Identification 40% / Product Identification 28% / Wire Identification 16% / Healthcare Identification 9% / People Identification 6% |
What The Price Assumes (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin (value-band context) | 6.5% |
| Operating margin today | 15.9% |
| Margin compression (value-band) | -9.4pp |
| Implied growth | 7.1% |
| Multiple paid | 16x operating income |
The operating-margin figure is value-band context at year 12: derived from the framework's value band, a separate calculation — not part of the priced-in solve.
Solve inputs: computed at a 8.9% cost of capital with 4% terminal growth over a 5-year stage.
How unusual the bet is: within-range (limited comparison data)
| Reference | Value |
|---|---|
| vs own history | -0.17σ |
| cohort percentile (of 225 peers) | 31 |
Valuation X-Ray
Asset, earnings-power and peer-multiple models all land far below the price; ONLY the growth-DCF reaches it. The bet is durable compounding the static frames structurally cannot price (a moat/durability premium).
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 1.72x | 5 | expensive |
| Earnings | 1.97x | 5 | expensive |
| Relative | 1.30x | 5 | expensive |
| Growth | 0.92x | 3 | justifies |
Families that justify the price: Growth Families that call it expensive: Asset, Earnings
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 9.2%); the inversion above states its own rate.
Per-Model Detail (n=18)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $98.49 | 0.92x | yes | FCF base $0.2B, growth 10% (input: historical growth), terminal g 4.0%, WACC 9.2%, 6yr projection |
| DCF Exit Multiple | Growth | $101.27 | 0.89x | yes | Exit EV/EBITDA: 11.6x / 13.6x / 15.6x (bear / base = today's held flat / bull), 6yr |
| Relative Valuation | Relative | $90.26 | 1.00x | yes | P/E 20x (static sector reference · 2026-04), scenarios: 16.7x / 20.0x / 23.3x (bear / base = reference held flat / bull), EV/EBITDA 13x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $46.50 | 1.94x | yes | BV/sh $28.43, ROE (TTM) 15.1%, ke 9.3% |
| Two-Stage Excess Return | Asset | $58.75 | 1.54x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $78.76 | 1.15x | yes | Rev $1.7B, growth 10% (input: historical growth; tapered), Terminal P/S: 2.2x / 2.6x / 3.0x (bear / base = today's held flat / bull, cap 8x) |
| Peter Lynch Fair Value | Relative | $51.54 | 1.75x | yes | EPS $4.30, growth 9% (input: historical EPS growth), PEG=2.30 (Overvalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $45.61 | 1.98x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $0.23B × (1−18%) / WACC 9.2% → EPV (no growth) |
| Residual Income | Asset | $60.21 | 1.50x | yes | BV $28.43 + 5yr PV of (ROE (TTM) 15.1% − Kₑ 9.3%) × BV; BV grows 8.8%/yr |
| Graham Number | Asset | $52.42 | 1.72x | yes | √(22.5 × EPS $4.30 × BVPS $28.43) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $86.12 | 1.05x | yes | EBITDA $0.31B × sector EV/EBITDA 13.0x |
| FCF Yield | Earnings | $45.79 | 1.97x | yes | FCF $192.7M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $40.61 | 2.22x | yes | SBC-adj FCF $0.17B (FCF $0.19B − SBC $0.02B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $96.16 | 0.94x | yes | EPS $4.30 × (8.5 + 2×9.1%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $12.17 | 7.41x | yes | BV $28.43 × (ROIC 3.9% / WACC 9.2%) |
| P/Sales Sector | Relative | $69.59 | 1.30x | yes | Revenue $1.66B × sector P/S 2.0x |
| PEG Fair Value | Relative | $58.67 | 1.54x | yes | EPS $4.30 × (PEG 1.5 × growth 9.1% (input: historical EPS growth)) → PE 13.7x |
| Earnings Yield | Earnings | $46.44 | 1.94x | yes | EPS $4.30 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net cash | $172.2m |
| Net debt / NOPAT (after-tax) | -0.80x (net cash) |
| Net debt / operating income (pre-tax) | -0.65x (net cash) |
| Interest coverage | 27.2x |
| Share count CAGR (buyback) | -1.9% |
| Burning cash | no |
Bullet Takeaways
- Labels and identification consumables sold into industrial manufacturing, electronic manufacturing, healthcare, chemical, oil, gas, alternative energy, automotive, aerospace, governments, mass transit, mechanical contractors, construction, utilities and more make this a small-ticket, high-repeat business rather than a capital-equipment one.
- The largest change in Brady's history is pending: an all-cash purchase of Honeywell's Productivity Solutions and Services division for 1.4 billion dollars, against a business that carried roughly $1.1 billion of revenue in 2025.
- Fiscal 2026 closed on 31 July and results arrive on 3 September, the first full-year print under a chief executive who took the job on 8 June 2026.
Bull Case
The price asks Brady for roughly 7.6% annual growth in operating profit over the next five years. Across its own history the company has compounded at around 8.3%. That is an unusually mild requirement, and the interesting question is not whether the company can clear it but why the market is only asking for that much.
Part of the answer is that nobody finds the product exciting. Brady makes labels, tags, signs, wire markers, hospital wristbands and the printers and software that produce them, sold into industrial manufacturing, electronic manufacturing, healthcare, chemical, oil, gas, alternative energy, automotive, aerospace, governments, mass transit, mechanical contractors, construction, utilities and a long list beyond. None of it costs much per unit. All of it gets used up. And a good share of it exists because a regulation says a pipe, a panel, a patient or a cable has to be identified in a specific way, which is why the company describes its own edge partly as Compliance expertise - Leveraging regulatory knowledge to provide innovative solutions that support customer compliance. Consumables sold into a compliance requirement are close to the best revenue shape available in industrials.
The recent numbers are better than the requirement. Net sales for the nine months to April 2026 increased 9.7% to $1,224.7 million compared to $1,116.3 million in the same period in the prior year, of which organic sales growth of 4.3%, and the March-to-April quarter ran considerably hotter, with organic growth of 8.2% and net sales up 13.8%. Profit is following the volume rather than lagging it: Europe and Australia segment profit increased 22.8% to $21.5 million in the three months ended April 30, 2026 compared to $17.5 million in the same period in the prior year.
Against its peer set the profitability holds up. Brady converts about 16.8% of revenue into operating profit. ZBRA manages 12.9% on far more revenue, ESAB 13.5%, KAI 14.8%, DCI 15.1% and PRLB 5.6%. Only GGG at 27.5%, TDY at 19.0% and CW at 18.4% do better, and those are heavier, more capital-hungry businesses. Brady earns an industrial-quality margin on a consumables model.
And it has been sitting on the balance sheet that lets it act. On the funded-debt measure the company holds net cash of about 148.6 million dollars, operating income covers its interest bill about 61.4 times over, and the share count has come down about 1.9% a year over four years. In April 2026 that optionality was spent: Brady agreed to buy Honeywell's Productivity Solutions and Services business for 1.4 billion dollars in an all-cash deal, adding a business that carried roughly $1.1 billion of revenue in 2025, with about $25 million of annual cost savings targeted within three years and closing expected in the second half of 2026. A company priced for mild growth has just bought roughly two thirds more revenue.
The bull case is that unglamorous compounding is the most reliable kind, and that this one is being asked to do less than it has historically done.
Bear Case
Brady's customers are factories, refineries, hospitals and construction sites, which means its order book is a derivative of industrial activity, and industrial activity in 2026 is not being set by demand alone. The peer KAI describes the environment its own filings report: Persistent tariff uncertainty and ongoing trade negotiations continue to impact market conditions. This evolving trade environment has resulted in longer quote-to-order cycles. Brady names the same exposure in its own risk language, warning about changes to trade agreements, which could have a direct or indirect impact on our ability to manufacture products, on our customers' demand for our products, or on our suppliers' ability to deliver raw materials. An 8.2% organic growth quarter in that setting is a good result, and it is also the kind of result that arrives near the top of a cycle rather than the bottom.
That matters because of how the earnings look when you stop using the most recent year. The normalized approach here values a five-year average of operating profit, roughly 230 million dollars once one-off charges are added back, against the roughly 271 million dollars the company earned over the trailing twelve months. Capitalize the average rather than the peak and the result lands far under the current quote, with the price about 119% above where the earnings-power methods land. That gap is the bear case stated arithmetically: today's price is paid on today's earnings, and today's earnings sit meaningfully above Brady's own recent normal.
Then there is the deal. Buying Honeywell's Productivity Solutions and Services division for 1.4 billion dollars, entirely in cash, against a company holding roughly 148.6 million dollars of net cash means borrowing most of the purchase price. The pristine balance sheet that currently bounds the downside is about to stop being pristine. The target carried around $1.1 billion of revenue in 2025, which would enlarge Brady by roughly two thirds in one step, and it sits in barcode scanning and mobile computing hardware rather than in the consumables business Brady actually knows. Integration risk of that scale is not a footnote; it is the dominant variable in the next three years of results.
The people executing it are new. Vineet Nargolwala became chief executive on 8 June 2026, succeeding Russell Shaller after eleven years. A new chief executive closing the largest acquisition in a company's history within months of arriving is a governance situation worth watching rather than assuming. It is worth noting alongside how the company is owned: Brady's equity is split into Class A nonvoting common stock and Class B voting stock, so the outside shareholders funding this bet are, structurally, the ones without the vote.
Competition is the quieter pressure underneath all of it. Brady acknowledges that rivals may force us to reduce prices or incur additional costs to remain competitive in an environment in which business models, including the development and use of artificial intelligence technologies, are changing rapidly, and separately that its push into digital selling carries increased competition and pricing pressure brought about by other e-commerce participants. Low-ticket consumables sold through a catalogue and a website are exactly the category where search-driven price discovery grinds margins down slowly and permanently. None of that breaks a quarter. It is the sort of thing that quietly turns eight percent growth into four percent, which is precisely the difference between clearing the price's requirement and missing it.
Valuation
Sixteen and a half times operating income is where Brady trades, and inverted that resolves to roughly 7.6% annual growth in operating profit for five years, discounted at an 8.8% cost of capital with a 4% terminal rate. The company's own long-run pace has run a shade above that, so history has delivered slightly more than the market is currently demanding. Measured against the sector, the multiple sits in the lower half of the peer range.
The methods split cleanly by whether they credit growth. Only the forward cash-flow approaches reach today's price, and they get there by projecting a historical rate near eleven percent and holding today's EV/EBITDA multiple flat through the projection. Everything static lands well beneath: the price sits about 119% above where the earnings-power methods fall, and about 80% above where the book-value-and-return approaches land. That pattern names the bet precisely. Nothing in Brady's balance sheet or in a no-growth capitalization of its current profit supports $94.65. What supports it is durability, which the static frames structurally cannot price.
The most concrete version of what has to be true sits in the difference between two profit figures. The normalized approach values a five-year average of operating profit around 230 million dollars; the trailing year produced roughly 271 million dollars. The price is underwritten by the second number, not the first, and by the assumption that the second number is the new base rather than a cyclical high.
Recent evidence leans toward the base reading. The nine months to April 2026 saw net sales increased 9.7% to $1,224.7 million with organic sales growth of 4.3%, and profitability improved for reasons the filing attributes to volume rather than to one-offs, with the prior-year comparison carrying facility closure and reorganization costs the current year does not. Against peers, Brady's 16.8% operating margin sits above ZBRA at 12.9%, ESAB at 13.5%, KAI at 14.8% and DCI at 15.1%, and below GGG at 27.5% and TDY at 19.0%. A business in that band trading in the lower half of its cohort's multiple range is not being priced for excellence.
The balance sheet described here is the one that is about to change. On the funded-debt measure Brady holds net cash of about 148.6 million dollars, with operating income covering the interest bill about 61.4 times over and the share count declining about 1.9% a year across four years; a build that also counts lease obligations lands lower. That position funds the announced all-cash purchase of Honeywell's Productivity Solutions and Services business for 1.4 billion dollars, expected to close in the second half of 2026. Every solvency figure above describes Brady before that transaction settles, and the version of this company that exists in 2027 will be larger, more leveraged and harder to compare with the one the multiple was set against.
Catalysts
The April quarter was Brady's strongest of the year. Net sales rose 13.8% to $435.2 million with organic growth of 8.2%, operating cash flow reached $78.2 million, and the company lifted its fiscal 2026 outlook for adjusted diluted earnings per share, its own non-GAAP measure, to a range of $5.20 to $5.30 from $4.95 to $5.15. The quarterly filing shows the same shape underneath, with nine-month net sales increased 9.7% to $1,224.7 million and Europe and Australia segment profit increased 22.8% to $21.5 million in the three months ended April 30, 2026.
The event that will define the next two years was announced on 20 April 2026. Brady agreed to acquire Honeywell's Productivity Solutions and Services division for 1.4 billion dollars in an all-cash transaction, a business carrying roughly $1.1 billion of revenue in 2025, with about $25 million of annual cost savings targeted within three years and a close expected in the second half of 2026. The financing terms are the detail to watch, because an all-cash purchase of that size against Brady's current balance sheet has to be borrowed.
Two more dates matter. Vineet Nargolwala became chief executive on 8 June 2026, succeeding Russell Shaller after eleven years. And fiscal 2026 results, covering the year to 31 July, are scheduled for 3 September 2026, which will be the first occasion on which new management sets expectations for a combined company. The quarterly dividend of $0.245 per share declared on 19 May is payable on 31 July 2026.
Peer Cohorts (Per Segment, With Filing Citations)
Core business (reported)
- ZBRA (ZEBRA TECHNOLOGIES CORPORATION)
- FY2025 10-K: …our global network of partners. Our Competitive Strengths The following are core competitive strengths that we believe enable us to differentiate ourselves from our competitors: An industry leader focused on digitizing and automating operations, and improving enterprise workflows on the frontline We are focused on…
- FY2025 10-K: …• Monitor disruptive technologies and business models; • Innovate, develop and timely commercialize new technologies and offerings; 14 Table of Contents • Competitively price our offerings; • Offer superior customer service; • Provide offerings of high quality and reliability; • Provide dependable and efficient…
- TDY (TELEDYNE TECHNOLOGIES INC)
- FY2025 10-K: …systems engineering and integration, advanced technology application, software development and manufacturing solutions for defense, space, environmental and energy applications. Business segment results include net sales and operating income by segment but excludes corporate office expenses. Corporate expense…
- FY2025 10-K: 3 and 2024 can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections in the Company's Annual Report on Form 10-K for the year ended December 29, 2024. 22 Table of Contents Strategy Our strategy continues to emphasize growth in our four business segments: Digital…
- CW (CURTISS-WRIGHT CORPORATION)
- FY2025 10-K: …investments in research and development ("R&D") to fuel both innovation and organic growth. We also utilize a strong and healthy balance sheet to implement a disciplined capital allocation strategy prioritized by acquisitions as well as returns to shareholders, principally through share repurchases as well as…
- FY2025 10-K: …in highly competitive markets. Many of our products and services are sold in highly competitive markets, and are affected by varying degrees of competition, including competition for hiring and retaining skilled labor. We compete against companies that often have higher sales volumes and greater financial,…
- GGG (GRACO INC.)
- FY2025 10-K: …Net sales growth in the semiconductor and electric motor product applications in 2025 was partially offset by decreases in the environmental and high-pressure valves product applications. The operating margin rate for this segment for the year increased 6 percentage points compared to last year mostly due to the…
- FY2025 10-K: …offset continued softness in worldwide residential and non-residential construction markets. The operating margin rate for this segment in 2025 was 2 percentage points lower than 2024 as price realization and 2024 litigation costs that did not repeat were unable to offset higher product costs from increased tariffs…
- ESAB (ESAB Corporation)
- FY2025 10-K: …design and application engineering support. We believe the principal elements of competition in our served markets are the technical ability to meet customer specifications, product quality and reliability, brand names, price, application expertise and engineering capabilities, timely delivery and strong aftermarket…
- FY2025 10-K: …prices and within a reasonable amount of time could impair our ability to meet scheduled product deliveries to our customers and could hurt our reputation and cause customers to cancel orders. 15 The markets we serve are highly competitive. If we are unable to respond successfully to this competition, this could…
- KAI (KADANT INC)
- FY2025 10-K: …an integral role in enhancing efficiency, optimizing energy utilization, and maximizing productivity in process industries while helping our customers advance their sustainability initiatives with products that reduce waste or generate more yield with fewer inputs, particularly fiber, energy, and water. Producing…
- FY2025 10-K: …rates and economic policies impacting manufacturers' operating costs. Persistent tariff uncertainty and ongoing trade negotiations continue to impact market conditions. This evolving trade environment has resulted in longer quote-to-order conversion times for capital orders. While customers continue to invest in…
- DCI (DONALDSON COMPANY, INC.)
- FY2025 10-K: …and product lines in which we participate are very competitive and we risk losing business based on a wide range of factors, including pric e, technology, performance, reliability and availability, geographic coverage and customer service. Our customers continue to seek technological innovation, productivity gains,…
- FY2025 10-K: …of the segments. The CODM considers variances in reported results to budget and variances to prior periods to make decisions about allocating resources to each segment. The Company's CODM is the Chief Executive Officer. In fiscal 2025 and 2024, Corporate and Unallocated included a charge of $ 16.8 million and $ 6.4…
- PRLB (Proto Labs, Inc.)
- FY2025 10-K: …customers, applications, and capabilities. Begin with most strategic customers and scale over time. • Drive Operational Efficiency - expand Factory and Network gross margins and capture operating expense leverage via efficiencies and productivity. Reallocate resources and funds to invest in the highest-priority…
- FY2025 10-K: …allocation and performance assessment is income (loss) from operations at the segment level. This measure is used to evaluate current-period performance, develop forecasts and budgets, and make decisions about capital and other resource allocations between segments. The Company's reportable segments are based upon…
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.
Sources
Brady Corporation acquisition announcement, April 20, 2026 · Brady Corporation leadership announcement, June 8, 2026 · Brady Corporation third quarter fiscal 2026 results, May 18, 2026 · Brady Corporation dividend declaration, May 19, 2026