Masco Corporation (MAS): what the price requires

At today's price, Masco Corporation (MAS) is priced for +4.6% growth. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.

Generated: 2026-07-14 · Exported: 2026-07-16 · Source: https://boothcheck.com/report/MAS

Headline

FieldValue
TickerMAS
CompanyMasco Corporation
Current price$76.05/sh
CompositionPlumbing Products 66% / Decorative Architectural Products 34%

What The Price Requires (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

FieldValue
Inversion basiswhole-company
Operating margin needed10.1%
Operating margin today17.1%
Margin compression implied-7.0pp
Implied growth4.6%
Multiple paid14x operating income

The operating-margin requirement is derived from the framework's value band at year 12, a separately labeled basis from the headline growth/duration solve.

Solve inputs: computed at a 9.2% cost of capital with 4% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~5.2pp.

How unusual the bet is: within-range

ReferenceValue
vs own history+0.29σ
cohort percentile (of 225 peers)16
implied end-window share0%

Valuation X-Ray

The price is justified by relative-multiple and growth-DCF.

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.

FamilyMedian price/FVModelsReads
Asset—0—
Earnings1.45x4expensive
Relative1.08x5expensive
Growth1.22x3expensive

Families that justify the price: Relative, Growth

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 7.8%); the inversion above states its own rate.

Per-Model Detail (n=12)

ModelFamilyFVPrice/FVApplicableMethodology
DCF Perpetual GrowthGrowth$61.861.23xyesFCF base $0.9B, growth -0% (input: historical growth), terminal g 0.5%, WACC 7.8%, 5yr projection
DCF Exit MultipleGrowth$92.170.83xyesExit EV/EBITDA: 10.8x / 12.8x / 14.8x (bear / base = today's held flat / bull), 5yr
Relative ValuationRelative$71.571.06xyesP/E 18x (static sector reference · 2026-04), scenarios: 15.2x / 18.0x / 20.8x (bear / base = reference held flat / bull), EV/EBITDA 12x
Simple DDMGrowth——no—
Two-Stage DDMGrowth——no—
Simple Excess ReturnAsset——no—
Two-Stage Excess ReturnAsset——no—
Discounted Future Market CapGrowth$62.101.22xyesRev $7.7B, growth -0% (input: historical growth; tapered), Terminal P/S: 1.7x / 2.0x / 2.3x (bear / base = today's held flat / bull, cap 8x)
Peter Lynch Fair ValueRelative$48.481.57xyesEPS $4.04, growth 11% (input: historical EPS growth), PEG=1.75 (Overvalued)
Margin TrajectoryGrowth——no—
Earnings Power ValueEarnings$65.931.15xyesNormalized EBIT (5y avg op income, one-time charges added back) $1.32B × (1−22%) / WACC 7.8% → EPV (no growth)
Residual IncomeAsset——no—
Graham NumberAsset——no—
EV/EBITDA RelativeRelative$70.411.08xyesEBITDA $1.43B × sector EV/EBITDA 12.0x
FCF YieldEarnings$36.322.09xyesFCF $943.0M / Kₑ 9.3% — zero-growth perpetuity
SBC-Adj FCF YieldEarnings——no—
Ben Graham FormulaEarnings$100.340.76xyesEPS $4.04 × (8.5 + 2×10.6%) × (4.4 / 5.3%)
ROIC-Justified P/BAsset——no—
P/Sales SectorRelative$94.110.81xyesRevenue $7.68B × sector P/S 2.5x
PEG Fair ValueRelative$64.041.19xyesEPS $4.04 × (PEG 1.5 × growth 10.6% (input: historical EPS growth)) → PE 15.9x
Earnings YieldEarnings$43.681.74xyesEPS $4.04 / required return 9.3% (Rf 4.3% + ERP 5.0%)
Funds From Operations MultipleRelative——no—
Clinical Phase NPVGrowth——no—
MertonAsset——no—
V5 Mechanical———no—

Solvency

FieldValue
Net debt$2.7b
Net debt / NOPAT (after-tax)2.62x
Net debt / operating income (pre-tax)2.05x
Interest coverage12.8x
Share count CAGR (buyback)-4.1%
Burning cashno

Bullet Takeaways

Masco is a mature, high-margin home-products compounder, not a growth story. The price embeds only about 4.7% operating-income growth, which is the right lens for a steady cash generator with a 16.6% operating margin.

The business is tilted to repair-and-remodel, not new construction. Roughly 84% of plumbing sales and all of paint sales go to R&R, which dampens the swings from housing starts and showed up in a Q1 2026 print of plumbing sales up 9%.

The capital return is the shareholder engine. A fresh $2 billion buyback and a raised dividend, against a share count already shrinking about 4.1% a year, do much of the per-share work in a low-growth business.

Bull Case

Read Masco for what it is: a mature, cash-generative maker of home products that should be valued on durability and capital return, not on growth. It owns two simple, branded franchises, Plumbing Products at roughly 66% of revenue (Delta faucets, Hansgrohe) and Decorative Architectural Products at 34% (Behr paint sold through Home Depot). These are repeat-purchase, brand-led categories with pricing power, and the company runs them at a 16.6% operating margin. The priced-in assumption is modest, about 4.7% operating-income growth, which is exactly the bar a steady compounder should clear without heroics. When the market asks little of growth and the business delivers consistent margins, the setup favors the patient holder.

The revenue mix is the quiet quality advantage. Roughly 84% of plumbing sales and 100% of paint sales are directed to repair-and-remodel rather than new construction, which dampens the cyclicality that plagues pure homebuilding suppliers. Q1 2026 showed the model working: net sales rose 6% to $1.918 billion, with Plumbing up 9% to $1.364 billion on steady North American and international R&R demand and operating margin expanding 60 basis points to 16.5%. Behr held flat on the top line but grew operating profit 19% at a 19% margin, with Pro paint sales up mid-single digits. Adjusted EPS rose 20%. Management maintained full-year adjusted EPS guidance of $4.10 to $4.30 and targets plumbing margin expansion toward roughly 18%.

Capital allocation is where a mature business creates per-share value, and Masco is disciplined here. It authorized a fresh $2 billion share repurchase program and raised its quarterly dividend to $0.32, on top of a share count already shrinking about 4.1% a year, with interest coverage near 13 times leaving ample room. The 10-K shows the operating discipline behind the margins, including managing input volatility through "long-term agreements with certain significant suppliers" for raw materials (FY2025 10-K, accession 0000062996-26-000005). A best-in-class-margin, R&R-tilted, brand-led compounder returning cash aggressively is a name where a low growth assumption plus steady buybacks compounds quietly over time.

Bear Case

The external variable with the most leverage on Masco's thesis is input cost, and the company sits directly in the path of tariffs and commodity inflation. The plumbing business is built on metals, and the 10-K is explicit about the exposure: the company has "encountered price volatility for brass, brass components and any components containing copper and zinc" (FY2025 10-K, accession 0000062996-26-000005). Tariffs on imported components and commodity inflation in copper and zinc both compress the margins that justify the valuation, and management has had to raise prices to counter higher tariff costs, a lever that works until consumers push back. At a price that already trades above most valuation methods, with the X-ray figure near $65 against a $74 (June 27, 2026) quote, a margin squeeze is not cushioned.

The demand backdrop is soft and the company knows it. Masco projects global repair-and-remodel markets to be "roughly flat" in 2026, which means the entire bull case for organic growth rests on share gains and pricing, not market tailwind. R&R demand is sensitive to consumer confidence, home equity, and big-ticket discretionary spending, all of which weaken when rates stay high and housing turnover stalls. The R&R tilt dampens new-construction cyclicality, but it does not eliminate macro sensitivity; it just changes the channel through which a slowdown arrives. A flat-market year with a fully-valued stock leaves little room for a demand disappointment.

The growth ceiling is the structural limit. This is a mature business in mature categories, and the priced-in 4.7% growth is honest about that, but it also means the equity return depends heavily on multiple stability and continued buybacks rather than on the business getting bigger. The 10-K flags the risks of the acquisitions Masco uses to supplement organic growth, including "diversion of management attention," integration issues, and "unforeseen liabilities" (FY2025 10-K, accession 0000062996-26-000005). If commodity and tariff costs eat the margin, or if R&R demand softens below the flat baseline, a low-growth business priced above its valuation methods has two of its three return levers, growth and multiple, working against it, leaving only the buyback to defend the price.

Valuation

Masco is valued as a mature compounder, and the methods describe a modestly full price. Against the $74.40 quote, the relative-multiple family supports the price while the earnings-power and growth-DCF families sit somewhat below it, and the blended X-ray figure across four methods lands near $65.44. The priced-in characterization is within range, justified by peer multiples, which fits a steady business whose valuation is anchored to how comparable home-products companies trade rather than to an aggressive forward model.

The priced-in math is undemanding on growth. The embedded assumption is roughly 4.7% operating-income growth against a current operating margin of 16.6% and an implied terminal margin near 10.2%. That is a reasonable bar for a business with two branded franchises and a track record of margin expansion, and the modest growth requirement is the reassuring part: the price is not betting on a reacceleration, it is betting on continuity. The valuation does not lean on filing-sourced growth inputs; what the filings confirm is the operating quality and the supplier-agreement discipline that protects margins (FY2025 10-K, accession 0000062996-26-000005).

The balance sheet is sound. Net debt of about $2.7 billion sits at roughly two times operating income with interest coverage near 13 times, comfortable for a stable cash generator. The honest read is that this is a quality compounder trading a touch above where the conservative methods land, with the gap justified by best-in-class margins and reliable capital return. An investor here is underwriting that Masco holds its margins through commodity and tariff pressure, that R&R demand does not deteriorate below the flat 2026 baseline, and that the $2 billion buyback keeps shrinking the share count. The reward is steady compounding; the risk is paying a full multiple for a low-growth business whose margins face real input-cost pressure.

Catalysts

Q1 2026 results (reported April 2026) beat and lifted the stock. Net sales rose 6% to $1.918 billion, with Plumbing up 9% to $1.364 billion at a 16.5% operating margin and Behr paint flat on sales but up 19% in operating profit at a 19% margin. Adjusted EPS rose 20%, and the stock jumped roughly 9% to 11% on the print and the expanded buyback. Management maintained full-year adjusted EPS guidance of $4.10 to $4.30, with plumbing margin targeted toward about 18% and decorative architectural roughly flat at a 19% margin. The cadence of plumbing growth and paint demand against a flat R&R market is the key near-term catalyst.

The demand and cost backdrop sets the tension. Masco projects global repair-and-remodel markets roughly flat in 2026, so organic growth depends on share gains and pricing. The swing factors are tariff and commodity costs, particularly copper, zinc, and brass for plumbing, and whether Masco can keep passing those costs through without denting volume. Any sign of an R&R recovery, helped by easing rates or improving home turnover, would be an upside catalyst, while a consumer pullback on big-ticket remodeling is the main downside.

Capital return is the steady catalyst. The board authorized a new $2 billion share repurchase program and raised the quarterly dividend to $0.32, reinforcing a buyback that already shrinks the share count about 4.1% a year. Analyst sentiment is constructive, with a consensus Buy across roughly 14 analysts and several price-target increases citing best-in-class margins, though half the analysts sit at Hold, reflecting the full valuation. The catalysts that would re-rate the stock are sustained plumbing margin expansion, an R&R demand inflection, and continued aggressive buybacks; the risk is margin pressure from input costs against a flat-demand year.

Peer Cohorts (Per Segment, With Filing Citations)

Plumbing Products (reported)

Decorative Architectural Products (reported)

Methodology Note

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.

View the full interactive MAS report on boothcheck