Benzinga | Nov 10, 2021 03:58PM EST

Oppenheimer Downgrades Mueller Water - Read Why

* Oppenheimer analyst Bryan Blair downgraded Mueller Water Products, Inc. (NYSE:MWA) to Perform from Outperform without a price target.

* Blair says the company reported a "cost-driven" fiscal Q4 miss and signaled continued operating inefficiencies over the coming quarters.

* Although demand remains strong, the combination of cost inflation, supply chain constraints, and labor shortages pressure Mueller's first half of 2022 earnings outlook and add risk to an anticipated earnings and cash flow inflection over the next two fiscal years, says the analyst.

* Recently, Mueller Water reported Q4 net sales growth of 11.4% year-over-year to $295.6 million, missing the consensus of $296.21 million. Adjusted EPS of $0.12 missed the estimate of $0.19.

* The company generated an adjusted operating income of $29.7 million compared with $41.8 million in the prior-year quarter.

* Adjusted EBITDA margin was 15.4% versus 21.7% last year.

* FY22 Outlook: The company currently anticipates consolidated net sales of 4% - 8% and Adjusted EBITDA to increase 4% - 8%.

* Also Read: Boenning & Scattergood Downgrades Mueller Water Post Q4 Results

* Price Action: MWA shares are trading lower by 1.33% at $15.23 on the last check Wednesday.