MUELLER INDUSTRIES INC (MLI): what the price requires

The current priced-in claim for MUELLER INDUSTRIES INC (MLI) is temporarily suppressed because the live engine record is unavailable. The dated report remains a snapshot, not a current market read.

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

Headline

FieldValue
TickerMLI
CompanyMUELLER INDUSTRIES INC
Current price$56.37/sh
CompositionTube and fittings 52% / Brass rod, forgings, wire and cable 21% / OEM components, tube & assemblies 5% / Valves and plumbing specialties 12% / Flex duct and other HVAC components 9% / Other 1%

What The Price Requires (Inversion)

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

FieldValue
Inversion basiswhole-company
Operating margin needed6.4%
Operating margin today24.9%
Margin compression implied-18.5pp
Multiple paid5x 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.

The price sits below what even a 5%/yr operating-profit decline would warrant; the inversion reports a bound, not a solved growth path.

Solve inputs: computed at a 10.8% cost of capital with 4% terminal growth over a 5-year stage.

How unusual the bet is: within-range

ReferenceValue
vs own history-0.59σ
cohort percentile (of 76 peers)1
implied end-window share0%

Valuation X-Ray

The price is supported by asset-based and earnings-power and relative-multiple and growth-DCF value. A value/asset-supported name, not a pure growth bet.

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
Asset0.68x5justifies
Earnings0.75x5justifies
Relative0.53x5justifies
Growth0.69x3justifies

Families that justify the price: Asset, Earnings, Relative, Growth

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)

ModelFamilyFVPrice/FVApplicableMethodology
DCF Perpetual GrowthGrowth$148.720.38xyesFCF base $0.7B, growth 11% (input: historical growth), terminal g 4.0%, WACC 9.2%, 5yr projection
DCF Exit MultipleGrowth$81.470.69xyesExit EV/EBITDA: 4.0x / 4.4x / 9.4x (bear / base = today's held flat / bull), 5yr
Relative ValuationRelative$106.100.53xyesP/E 14x (static sector reference · 2026-04), scenarios: 10.5x / 14.0x / 16.8x (bear / base = reference held flat / bull), EV/EBITDA 8x
Simple DDMGrowth——no—
Two-Stage DDMGrowth——no—
Simple Excess ReturnAsset$82.540.68xyesBV/sh $30.06, ROE (TTM) 25.4%, ke 9.3%
Two-Stage Excess ReturnAsset$137.720.41xyes5yr excess ROE then converge to ke=9.3%
Discounted Future Market CapGrowth$51.291.10xyesRev $4.4B, growth 11% (input: historical growth; tapered), Terminal P/S: 1.1x / 1.4x / 1.7x (bear / base = today's held flat / bull, cap 6x)
Peter Lynch Fair ValueRelative$133.530.42xyesEPS $3.82, growth 35% (input: historical EPS growth), PEG=0.21 (Undervalued)
Margin TrajectoryGrowth——no—
Earnings Power ValueEarnings$77.610.73xyesNormalized EBIT (5y avg op income, one-time charges added back) $0.85B × (1−21%) / WACC 9.2% → EPV (no growth)
Residual IncomeAsset$122.360.46xyesBV $30.06 + 5yr PV of (ROE (TTM) 25.4% − Kₑ 9.3%) × BV; BV grows 8.8%/yr
Graham NumberAsset$50.801.11xyes√(22.5 × EPS $3.82 × BVPS $30.06) — Graham's conservative floor
EV/EBITDA RelativeRelative$93.210.60xyesEBITDA $1.13B × sector EV/EBITDA 8.0x
FCF YieldEarnings$75.090.75xyesFCF $652.2M / Kₑ 9.3% — zero-growth perpetuity
SBC-Adj FCF YieldEarnings$72.360.78xyesSBC-adj FCF $0.62B (FCF $0.65B − SBC $0.03B) capitalized at Kₑ
Ben Graham FormulaEarnings$123.100.46xyesEPS $3.82 × (8.5 + 2×15.0%) × (4.4 / 5.3%)
ROIC-Justified P/BAsset$39.341.43xyesBV $30.06 × (ROIC 12.0% / WACC 9.2%)
P/Sales SectorRelative$59.120.95xyesRevenue $4.37B × sector P/S 1.5x
PEG Fair ValueRelative$143.060.39xyesEPS $3.82 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x
Earnings YieldEarnings$41.241.37xyesEPS $3.82 / 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 cash$1.4b
Net debt / NOPAT (after-tax)-1.62x (net cash)
Net debt / operating income (pre-tax)-1.28x (net cash)
Interest coverage22891.1x
Share count CAGR (buyback)-0.6%
Burning cashno

Bullet Takeaways

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)

Industrial Metals (reported)

Climate (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.

Sources

Mueller Q1 2026 earnings, April 21 2026 · Mueller FY2025 10-K

View the full interactive MLI report on boothcheck