ST. LOUIS - Core & Main Inc. (NYSE:CNM), a distributor of water, wastewater, storm drainage, and fire protection products, announced a share repurchase program authorizing the buyback of up to $500 million of its Class A common stock. This initiative reflects the company's confidence in its financial strength and commitment to delivering shareholder value.
The repurchase program was approved by the company's board of directors and is expected to be funded through existing cash, short-term borrowings, and future cash flows. Core & Main's CEO, Steve LeClair, emphasized the company's robust cash generation capabilities, which he believes will support continued investment in growth and shareholder returns.
The repurchase of shares is not mandatory and will be conducted at the company's discretion, depending on market conditions, stock price, capital needs, and other factors. The methods for the buyback may include open market purchases, private transactions, or other structured arrangements compliant with SEC Rule 10b5-1.
Headquartered in St. Louis, Core & Main operates over 350 locations across the United States, providing local expertise and a national supply chain to various end markets. With nearly 5,500 associates, the company plays a significant role in supporting community infrastructure.
The announcement includes forward-looking statements, which involve risks and uncertainties that could cause actual results to differ from those projected. These statements are based on current expectations and assumptions, and the company has no obligation to update them. This news is based on a press release statement from Core & Main.
In other recent news, Core & Main reported strong first quarter results for fiscal year 2024, with net sales rising by 11% to a record $1.74 billion. Despite increased interest expenses and a competitive market, the company raised its annual outlook for net sales and adjusted EBITDA.
However, Truist Securities revised its price target for Core & Main from $56.00 to $50.00, maintaining a Hold rating on the company's shares. This adjustment followed the company's recent financial results and management's remarks highlighting increasing price competition from smaller distributors. On the other hand, RBC (TSX:RY) Capital Markets maintained its Outperform rating on shares of Core & Main, with a consistent price target of $60.00, considering the sell-off to be an overreaction.
These are recent developments regarding Core & Main, a company that continues to navigate a competitive market while maintaining its growth trajectory.
InvestingPro Insights
Core & Main Inc. (NYSE:CNM) has demonstrated a strong commitment to shareholder returns with its recent announcement of a substantial $500 million share repurchase program. This move is backed by the company's solid financial performance, as evidenced by the real-time data from InvestingPro. With a robust market capitalization of $9.51 billion and a P/E ratio of 22.13, the company's valuation reflects its growth potential and market confidence. The adjusted P/E ratio for the last twelve months as of Q1 2025 stands at 23.76, indicating that investors are willing to pay a premium for future earnings.
InvestingPro Tips highlight that management's aggressive share buyback activity is a positive signal for investors, showcasing the leadership's belief in the intrinsic value of the company. Additionally, the stock's recent performance indicates that it is in oversold territory according to the Relative Strength Index (RSI), suggesting that it could be an opportune time for investors to consider CNM shares.
Despite some analysts revising earnings expectations downwards for the upcoming period, Core & Main has been profitable over the last twelve months, with a return on assets of 9.1%. It's also important to note that the company's liquid assets exceed short-term obligations, underlining its financial stability and ability to meet immediate financial commitments.
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