MUELLER INDUSTRIES INC (MLI): what the price assumes

In the published model solve dated 2026-Q2, anchored at $62.80, MUELLER INDUSTRIES INC (MLI) is priced for +7.3% 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 2026-06-27.

Generated: 2026-08-30 · Exported: 2026-08-31 · Source: https://boothcheck.com/report/MLI

Headline

What The Price Assumes (Inversion)

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

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 10.5% cost of capital with 4% terminal growth over a 5-year stage.

How unusual the bet is: within-range (limited comparison data)

Valuation X-Ray

The price is justified by relative-multiple and growth-DCF; asset-based/earnings-power land below the price.

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.

Families that justify the price: Relative, 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=15)

Economic-Unit Decomposition (Sum Of The Parts)

One or more material disclosed units has unresolved economics. Unknown/general is not evidence of homogeneity: segment SOTP is primary but incomplete, consolidated cash flow may remain only a secondary cross-check when every unit shares an enterprise basis, and one sector multiple or target margin is withheld.

No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.

Solvency

Bullet Takeaways

• Mueller makes copper tube, fittings, brass rod, and HVAC and plumbing components, a business whose demand the 10-K ties to new construction, "repairs and remodeling projects," and industrial uses, which makes it a high-quality cyclical with a 24% operating margin and a 25% return on equity.
• The balance sheet is the standout: the company holds about $1.4 billion of net cash with essentially no debt, an unusual position for a metals-linked manufacturer and a genuine cushion against the cycle.
• The biggest risk and the biggest swing factor are the same thing, copper: COMEX copper averaged $5.80 a pound in the first quarter, up nearly 27%, which lifted both sales and earnings, so a reversal in the metal price would unwind part of the recent record.

Bull Case

Look at what the market is paying versus what the business is delivering, and the gap leans bullish. At $137.41 (June 27, 2026) the stock trades around thirteen times trailing operating income, a multiple that implies roughly 11% annual operating growth over five years. That is within what Mueller has recently produced, but it sits against a company earning a 24% operating margin and a 25% return on equity, with a debt-free balance sheet. A cyclical earning those returns usually commands more than thirteen times, which tells you the market is discounting the earnings as commodity-inflated rather than crediting them as structural. The bull case is that the quality is more durable than the multiple assumes.

The first quarter was a record, and it was broad. Net sales rose to $1.19 billion from $1.00 billion, diluted EPS climbed to $2.16 from $1.39, and net income reached $239.0 million, with the Piping Systems segment leading at $760.5 million, up 18.9%. The 10-K grounds the demand in durable drivers: new construction, "repairs and remodeling projects," and "various transportation, automotive, and industrial applications." Repair and remodel demand is the steadier half of that mix, because pipes and fittings get replaced regardless of the new-build cycle, which gives Mueller a base of recurring volume underneath the more cyclical construction layer.

The capital position is the bull's trump card. Mueller carries roughly $1.4 billion of net cash with essentially no gross debt, so interest coverage is not even a meaningful question. That cash funds both growth and returns: the company closed the Bison Metals acquisition, raised its dividend to $0.35 from $0.25, and has been buying back stock. A debt-free manufacturer generating a 25% return on equity, paying a rising dividend, and bolting on acquisitions from cash is the textbook definition of a well-run cyclical compounder. The bull case is that the market is treating Mueller as a copper-price proxy when it is actually a high-return, fortress-balance-sheet operator that happens to benefit from copper, and the gap between those two readings is the opportunity.

Bear Case

The cleanest bear angle on a cash-rich company is what it does with the cash. Mueller sits on roughly $1.4 billion of net cash, and a pile that large is both a strength and a question. The first quarter showed the company deploying it into the Bison Metals acquisition and booking a $41.4 million gain on the Sherwood Valve sale, while raising the dividend and repurchasing shares. That is reasonable capital allocation, but it also means a meaningful chunk of the return story now depends on management buying the right businesses at the right prices, a skill that is harder to underwrite than the core operation. Acquisition-led growth is where well-run cyclicals most often stumble, paying up at the top of the cycle when the cash is most abundant and the targets most expensive.

The deeper issue is what is actually driving the record earnings. COMEX copper averaged $5.80 a pound in the quarter, up nearly 27% year over year, and the company itself attributes much of the sales increase to "higher selling prices stemming from the rise in raw material costs." A copper-products maker that reports higher revenue largely because copper got more expensive is not necessarily selling more pipe; it is passing through a commodity price. When copper reverses, the same passthrough runs backward, and the revenue and the margin that looked like growth deflate with the metal. The bear reads the trailing earnings as partly a commodity windfall rather than a durable step-change, which is exactly why the market assigns only a mid-teens multiple.

Cyclicality and policy round out the case. Mueller's end markets, construction, remodeling, and industrial, all soften when financing costs rise and housing turnover slows, and the 10-K flags that "new and changing laws or tariffs, regulations, executive orders" may "impact customer budgets and create uncertainty." A first-quarter EPS that nearly doubled, helped by a one-time asset-sale gain and a copper spike, is a high-water mark, not a run-rate. The bear case is not that Mueller is poorly run; the balance sheet alone refutes that. It is that the price already reflects a strong cyclical and commodity moment, the earnings are flattered by copper and a one-off gain, and the next leg of growth rests on acquisitions whose returns are unproven.

Valuation

At about thirteen times trailing operating income, $137.41 inverts to roughly 11% annual operating growth held for five years. For a cyclical that just posted record results, that bar is within reach, but the figure carries an asterisk: the trailing earnings were lifted by a copper price up nearly 27% and a one-time asset-sale gain, so the operating income the multiple divides into may be running above its through-cycle level. A multiple that looks cheap against peak earnings can look fair against normalized ones.

The methods split the way they do for a high-return cyclical at a cyclical high. The peer-multiple and growth-based cash-flow lenses sit near the price, while the asset-value and earnings-power lenses say expensive. The reason is instructive: the earnings-power method capitalizes a normalized, no-growth operating profit, which strips out exactly the copper-driven and one-time elements that flattered the trailing year, and on that basis the stock looks dear. The asset-value lenses, anchored on a book value near $30 per share against a 25% return on equity, also land below the price, because book value lags the earnings power of a company that compounds at high returns. The honest synthesis is that the price is reasonable if you believe the current earnings are close to sustainable, and full if you believe a chunk of them is a copper-and-gains windfall.

Solvency is not a risk; it is an asset, and it changes how the downside reads. Mueller holds about $1.4 billion of net cash with essentially no debt, so the company could absorb a sharp cyclical downturn without any financial stress, and the cash itself is a buffer the price gets partly for free. The share count is roughly flat to slightly down, and the dividend was just raised, so capital is being returned rather than diluted away. The decisive question for the valuation is not whether the balance sheet survives, which is never in doubt, but whether the earnings base is durable. Strip out the copper tailwind and the asset-sale gain, normalize the operating profit, and the thirteen-times multiple is the market's reasonable estimate of a high-quality cyclical priced near, not below, what its through-cycle economics support.

Catalysts

Mueller's first-quarter 2026 report, released April 21, was a record and the stock reacted strongly. Net sales rose to $1.19 billion from $1.00 billion, diluted EPS climbed to $2.16 from $1.39, and net income reached $239.0 million, with the Piping Systems segment up 18.9% to $760.5 million. The quarter included a $41.4 million gain from the Sherwood Valve sale and the close of the Bison Metals acquisition on March 30, and management raised the dividend to $0.35 per share from $0.25. The single biggest external driver was copper: COMEX copper averaged $5.80 a pound, up 26.8%, which lifted both selling prices and reported sales.

The forward catalysts and risks both run through the copper market and the construction cycle. Higher copper prices flow through to revenue but can reverse, so the metal's direction is the swing factor on the next several prints, and the demand backdrop in new construction and remodeling sets the volume underneath the price. The capital-allocation cadence is the other watch item: with about $1.4 billion of net cash, further acquisitions like Bison Metals, continued buybacks, and the newly raised dividend are the levers management has to compound value, and how disciplined those acquisitions prove to be will shape the durability of the growth the price assumes.

Peer Cohorts (Per Segment, With Filing Citations)

Piping Systems (reported)

• CSTM (CONSTELLIUM SE)
• FY2025 10-K: …may result in us losing such customers or customer contracts; and • implementing manufacturing processes in new locations, or for new equipment or newly introduced products, may present difficulties, including operational and manufacturing disruptions, delays, or other complications, which could adversely affect our…
• FY2025 10-K: …primarily across North America, Europe, and Asia. Economic downturns in regional and global economies, or a prolonged recession in our principal industry segments, have had a negative impact on our operations in the past by reducing overall demand for our products, and could in the future have a negative impact on…
• KALU (KAISER ALUMINUM CORP)
• FY2025 10-K: …are used in food, beverage and critical safety related applications, our customers have demanding standards for product quality and consistency that make it difficult to become a qualified supplier. Suppliers must pass a rigorous qualification process to sell to both airframe and automotive manufacturers and must…
• FY2025 10-K: …and further improve our competitive cost position on all products produced at Trentwood. A significant portion of the Trentwood investment also focused on modernizing legacy equipment and the process flow for thin gauge plate to achieve Kaiser Select ® quality enhancements for Aero/HS Products and GE Products. We…
• WOR (WORTHINGTON ENTERPRISES, INC)
• FY2025 10-K: …and UL Solutions. Building Products has one principal domestic competitor in the low-pressure LPG cylinder market, and a number of foreign competitors in the LPG cylinder, non-refillable refrigerant, and well water and expansion tank markets. We believe that this business has the largest market share in the domestic…
• FY2025 10-K: …in our Building Products operating segment are generally stronger in the first and fourth quarters of our fiscal year due to weather conditions, customer business cycles, and the timing of renovation and new construction projects. Environmental Matters Our manufacturing facilities, like those of similar industries…
• ATI (ATI INC)
• FY2025 10-K: …place at facilities in Cudahy, Appleton and Coon Valley, WI, and Irvine, CA. In addition, we lease a facility in Margate, Florida to perform metal alloy-based additive manufacturing for the aerospace & defense industries. Within the AA&S segment, our production of zirconium, hafnium, niobium and related specialty…
• FY2025 10-K: …carriers or other third parties, but do reflect allocations among potentially responsible parties (PRPs) at Federal Superfund sites or similar state-managed sites after an assessment is made of the likelihood that such parties will fulfill their obligations at such sites and after appropriate cost-sharing or other…
• CRS (CARPENTER TECHNOLOGY CORPORATION)
• FY2025 10-K: …distribution businesses. The businesses in the PEP segment are managed with an entrepreneurial structure to promote flexibility and agility to quickly respond to market dynamics. (2) Raw Materials: Our business depends on continued receipt of critical raw materials for our day to day operations. These raw materials…
• FY2025 10-K: …were acquired or leased at various times over numerous years. There is an active maintenance program to ensure a safe operating environment and to keep facilities in good condition. In addition, we have an active capital spending program to replace equipment as needed to keep it technologically competitive on a…
• MTRN (MATERION CORPORATION)
• FY2025 10-K: , electrical, or mechanical properties from a surface area or particular section of the material. Our precision cladding and plating capabilities allow for precious metal or other base metals to be applied in continuous strip form, only where it is needed, reducing the material cost to our customers as well as…
• FY2025 10-K: …the United States, Asia, and Europe, as well as through direct sales offices and independent sales representatives throughout the world. Principal competition includes companies such as Honeywell International, Inc., Praxair, Inc., Solar Applied Materials Technology Corp., Grikin, Solaris, Ametek Electronic…

Industrial Metals (reported)

• CSTM (CONSTELLIUM SE)
• FY2025 10-K: …Our Metal Price Exposure It is our policy not to speculate on metal price movements. For all contracts, we seek to minimize the impact of fluctuation in the LME price and regional and other premiums for aluminum that we buy and sell in order to protect our cash flows, with the following methods: • In cases where we…
• FY2025 10-K: …and demand as well as production and raw material costs for a given primary aluminum shape and alloy combination in a particular region. Raw materials used in our products include alloying elements, such as copper, lithium, magnesium, manganese, silicon, silver or zinc . Prices for these alloying elements are subject…
• KALU (KAISER ALUMINUM CORP)
• FY2025 10-K: …to Net sales and Adjusted EBITDA to Net income, see below in "Results of Operations - Selected Operational and Financial Information." Metal Pricing Policies A fundamental part of our business model is to remain neutral to the impact from fluctuations in the market price for aluminum and certain alloys, thereby…
• FY2025 10-K: …segregated by alloys, necessary to create various aluminum alloys. We also recycle internally generated scrap from our own manufacturing processes. Initially in solid form, aluminum is heated in a vessel to a temperature at which it melts. While in molten form, additional metals (aluminum alloyed scrap, alloy metals,…
• ATI (ATI INC)
• FY2025 10-K: …Segment Our AA&S segment produces nickel-based alloys, titanium and titanium-based alloys, and specialty alloys in a variety of forms, including plate and sheet products. The major end markets for our flat rolled products are aerospace & defense, specialty and conventional energy, automotive, medical and electronics…
• FY2025 10-K: …prices exposes us to cash costs that may not be fully recovered through surcharge and index pricing mechanisms. Recently, due to inflationary trends, certain critical raw material costs, such as for nickel, hafnium, titanium sponge, cobalt, chromium, molybdenum, and scrap containing iron, nickel, titanium, chromium…
• CRS (CARPENTER TECHNOLOGY CORPORATION)
• FY2025 10-K: …additional information. (6) Competition: We are leaders in specialty materials for critical applications with over 135 years of metallurgical and manufacturing expertise. Our business is highly competitive. We manufacture and supply materials to a variety of end-use market sectors and compete with various companies…
• FY2025 10-K: …statements. See Note 18 to the consolidated financial statements in Item 8. "Financial Statements and Supplementary Data" for a full reconciliation of the statutory federal tax rate to the effective tax rates. Business Segment Results Summary information about our operating results on a segment basis is set forth…
• MTRN (MATERION CORPORATION)
• FY2025 10-K: …or strength-to-weight applications used in a variety of industries. Our ToughMet TM alloys provide extended life for industrial bushings and bearings and tremendous wear resistance in oil and gas rig components. Our SupremEX TM products offer the industry a high quality aluminum silicon carbide metal matrix composite…
• FY2025 10-K: …other data to demonstrate that the products will perform under the required design specifications. Performance Materials operates through three global product lines: Advanced Alloys, Specialty Materials, and Performance Solutions, as described below: • Advanced Alloys manufactures and globally provides to our…
• WOR (WORTHINGTON ENTERPRISES, INC)
• FY2025 10-K: …Products and Building Products segments. During fiscal 2025, prices for both hot-rolled and cold-rolled steel moderated from the elevated levels experienced in fiscal 2024. This decline contributed to improved spread as we maintained consistent pricing discipline across our product portfolio. Our sourcing strategy,…
• FY2025 10-K: Steel, Inc. 8-K 10.2 12/5/2023 10.39 Employee Matters Agreement, dated November 30, 2023, between Worthington Enterprises, Inc. and Worthington Steel, Inc. 8-K 10.3 12/5/2023 10.40 Trademark License Agreement, dated November 30, 2023, between Worthington Enterprises, Inc. and Worthington Steel, Inc. 8-K 10.4 12/5/2023…

Climate (reported)

• AOS (A. O. Smith Corporation)
• FY2025 10-K: …failure to realize the expected benefits, timing and extent of regulatory changes; competitive pressures on the Company's businesses, including new technologies and new competitors; the impact of potential information technology or data security breaches; negative impact of changes in government regulations or…
• FY2025 10-K: …in new construction. We anticipate that commercial water heater industry volumes will increase mid-single digits in 2026 after growing approximately five percent in 2025. We believe that the 2026 growth will come from the buy ahead of products that will be eliminated as a part of the DOE regulatory change for…
• FBIN (Fortune Brands Innovations, Inc.)
• FY2025 10-K: …results of operations. Concerns over the long-term effects of climate change have led to, and we expect will continue to lead to, governmental efforts around the world to mitigate those effects. We will need to respond to any new laws and regulations as well as to consumer, investor and business preferences resulting…
• FY2025 10-K: 2023-12-31 2024-12-28 0001519751 us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2023-12-31 2024-12-28 0001519751 us-gaap:SalesRevenueNetMember fbin:LowesMember us-gaap:CustomerConcentrationRiskMember 2023-12-31 2024-12-28 0001519751…
• AWI (ARMSTRONG WORLD INDUSTRIES, INC.)
• FY2025 10-K: …which may be difficult to project. Collective bargaining agreements covering approximately 260 employees at one U.S. plant will expire during 2026. We are also subject to the risk that strikes or other conflicts with organized personnel may arise or that we may become the subject of union organizing activity at our…
• FY2025 10-K: …effect on our financial condition, liquidity or results of operations. In addition, the financial condition of our vendors and suppliers may be adversely affected by general economic conditions, such as credit difficulties and the uncertain macroeconomic environment. Our international suppliers may be impacted by…
• WMS (ADVANCED DRAINAGE SYSTEMS, INC.)
• FY2025 10-K: …by existing and future competitors could result in reductions in sales, prices, volumes and gross margins that would materially adversely affect our business, financial condition, results of operations and cash flows. Furthermore, our success will depend, in part, on our ability to maintain our market share, generate…
• FY2025 10-K: , which could adversely impact our results of operations and cash flows. Our results of operations could be adversely affected by the effects of weather. Most of our business units experience seasonal variation as a result of the dependence of our customers on suitable weather to engage in construction projects.…

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.
• Economic-unit decomposition (SOTP): each disclosed business unit is assigned its native valuation basis before any multiple is applied. Operating units are valued on enterprise value; funded financial units are valued on their own common equity, because their borrowings fund earning assets rather than levering the parent. A company total is stated only once every material unit carries a supported value and the parent capital bridge reconciles.
• 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.