AZZ Incorporated (AZZ)
NYSE:AZZ
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AZZ
(NYSE:AZZ)
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Rating:78Outperform
Price Target:
$164.00
▲(19.50% Upside)
Action:Reiterated
Date:05/08/26
AZZ scores well primarily due to strengthened financial performance (notably improved leverage and a major step-up in free cash flow), supported by constructive technical trends and a positive, confident FY2027 earnings outlook. The main constraint on the overall score is valuation, with a very high P/E and a low dividend yield.
Positive Factors
Balance Sheet Strength
A dramatic reduction in leverage to near-zero enhances financial flexibility, reduces interest burden and supports sustained capital allocation (capex, dividends, buybacks, M&A). This materially lowers solvency risk and gives management room to invest for long-term growth.
Negative Factors
Precoat Metals Demand Softness
Precoat exposure to residential, HVAC and some nonresidential end markets creates cyclicality; persistent weakness reduces utilization and spreads fixed costs across lower volumes, pressuring margins and cash flow until volumes recover or mix improves.
Read all positive and negative factors
Positive Factors
Negative Factors
Balance Sheet Strength
A dramatic reduction in leverage to near-zero enhances financial flexibility, reduces interest burden and supports sustained capital allocation (capex, dividends, buybacks, M&A). This materially lowers solvency risk and gives management room to invest for long-term growth.
Read all positive factors
AZZ Key Performance Indicators (KPIs)
AZZ (AZZ) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$4.09B
Dividend Yield0.67%
Average Volume (3M)204.10K
Price to Earnings (P/E)12.8
Beta (1Y)1.21
Revenue Growth4.58%
EPS Growth556.92%
CountryUS
Employees3,684
SectorIndustrials
Sector Strength72
IndustryManufacturing - Metal Fabrication
Share Statistics
EPS (TTM)10.58
Shares Outstanding29,880,308
10 Day Avg. Volume183,986
30 Day Avg. Volume204,096
Financial Highlights & Ratios
PEG Ratio0.03
Price to Book (P/B)3.05
Price to Sales (P/S)2.47
P/FCF Ratio9.16
Enterprise Value/Market Cap1.13
Enterprise Value/Revenue2.81
Enterprise Value/Gross Profit11.73
Enterprise Value/Ebitda8.18
Forecast
1Y Price Target
$156.00Price Target Upside13.67% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
EPS Forecast (FY)6.84
Revenue Forecast (FY)$1.75B
AZZ Business Overview & Revenue Model
Company Description
AZZ Inc. offers galvanizing and metal coating solutions, welding solutions, specialty electrical equipment, and engineered services to the power generation, transmission, distribution, refining, and industrial markets in the United States and inte...
How the Company Makes Money
AZZ makes money mainly by selling value-added coated metals and related processing services to industrial and construction-oriented customers. (1) Precoat Metals: This business generates revenue from processing customer orders for coil-coated stee...
AZZ Earnings Call Summary
Earnings Call Date:Apr 22, 2026
(Q4-2026)
| % Change Since: |
Next Earnings Date:Jul 15, 2026
Earnings Call Sentiment Positive
The call presented a largely positive picture: record full-year revenue and profitability, robust Metal Coatings growth, margin expansion in the quarter, meaningful debt reduction, strong cash generation (including significant JV distributions), successful ramp of the Washington facility, and confident FY2027 guidance. Notable negatives include softness in Precoat Metals (residential and some nonresidential pressure), a Q4 loss and timing volatility from the AVAIL joint venture that reduced GAAP earnings and increased cash taxes, ongoing commodity and input inflation, and some demand timing uncertainty due to limited backlog. On balance, the financial and operational positives and the reiterated, upwardly framed guidance outweigh the headwinds.Positive Updates
Record Sales and Profitability
Full year sales of $1.65 billion, up ~4.6% YoY, marking record sales and profitability for the third consecutive year; consolidated adjusted EBITDA of $367.6 million (22.3% of sales) and adjusted EPS of $6.19, up 19% YoY.
Negative Updates
Precoat Metals Softness
Precoat Metals full year sales declined ~2.3% YoY (Q4 down ~2.4%); segment impacted by industry-wide softness in residential and pockets of construction, transportation and HVAC demand; management expects Precoat to be roughly flat in FY2027 with near-term headwinds.
Read all updates
Q4-2026 Updates
Positive
Negative
Record Sales and Profitability
Full year sales of $1.65 billion, up ~4.6% YoY, marking record sales and profitability for the third consecutive year; consolidated adjusted EBITDA of $367.6 million (22.3% of sales) and adjusted EPS of $6.19, up 19% YoY.
Read all positive updates
Company Guidance
AZZ reiterated fiscal 2027 guidance calling for sales of $1.725–$1.775 billion, adjusted EBITDA of $360–$400 million, and adjusted diluted EPS of $6.50–$7.00, while estimating debt reduction of $130–$170 million and assuming roughly $90 million of capex at the midpoint; management noted this outlook does not assume incremental M&A benefits. For context, FY2026 delivered record sales of $1.65 billion, adjusted EBITDA of $367.6 million (22.3% of sales), adjusted EPS of $6.19, $80.8 million of capex for the year (≈$125 million invested in the Washington facility over three years), $23 million of cash dividends paid, $20 million of share repurchases, and year-end net debt-to-EBITDA of ~1.4x after $385 million of debt reduction.AZZ Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
85
Very Positive
Cash Flow
88
Very Positive
| Breakdown | Feb 2026 | Feb 2025 | Feb 2024 | Feb 2023 | Feb 2022 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 1.65B | 1.58B | 1.54B | 1.32B | 525.60M |
| Gross Profit | 394.95M | 382.68M | 363.46M | 295.94M | 146.15M |
| EBITDA | 566.02M | 334.17M | 316.59M | 252.06M | 111.47M |
| Net Income | 317.26M | 128.83M | 101.61M | -52.97M | 84.02M |
Balance Sheet | |||||
| Total Assets | 2.21B | 2.23B | 2.20B | 2.22B | 1.13B |
| Cash, Cash Equivalents and Short-Term Investments | 705.00K | 1.49M | 4.35M | 2.82M | 12.08M |
| Total Debt | 538.39M | 879.13M | 977.23M | 1.09B | 241.18M |
| Total Liabilities | 876.44M | 1.18B | 1.26B | 1.37B | 465.66M |
| Stockholders Equity | 1.34B | 1.05B | 934.49M | 853.46M | 667.37M |
Cash Flow | |||||
| Free Cash Flow | 444.67M | 134.03M | 149.35M | 13.04M | 57.60M |
| Operating Cash Flow | 525.45M | 249.91M | 244.47M | 70.16M | 86.01M |
| Investing Cash Flow | -91.48M | -115.00M | -95.06M | -1.23B | -86.83M |
| Financing Cash Flow | -434.12M | -138.69M | -147.89M | 1.15B | 912.00K |
AZZ Technical Analysis
Positive
137.24
Price Trends
134.36
Positive
129.89
Positive
118.40
Positive
Market Momentum
1.18
Positive
45.47
Neutral
8.94
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AZZ, the sentiment is Positive. The current price of 137.24 is below the 20-day moving average (MA) of 143.31, above the 50-day MA of 134.36, and above the 200-day MA of 118.40, indicating a neutral trend. The MACD of 1.18 indicates Positive momentum. The RSI at 45.47 is Neutral, neither overbought nor oversold. The STOCH value of 8.94 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AZZ.
AZZ Risk Analysis
AZZ disclosed 35 risk factors in its most recent earnings report. AZZ reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
AZZ Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $4.09B | 12.84 | 24.53% | 0.67% | 4.58% | 556.92% | |
77 Outperform | $1.06B | 17.70 | 10.73% | ― | 10.67% | 30.61% | |
75 Outperform | $1.69B | 41.89 | 3.84% | ― | 9.43% | 80.11% | |
70 Outperform | $2.69B | 15.14 | 11.58% | 1.27% | 14.99% | 86.18% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
63 Neutral | $502.54M | 30.80 | 11.72% | 3.49% | 20.94% | 88.74% |
* Industrials Sector Average
AZZ
AZZ
137.01
47.34
52.80%
IIIN
Insteel Industries
25.86
-8.84
-25.48%
NWPX
Northwest Pipe Company
109.53
68.86
169.31%
PRLB
Proto Labs
71.13
31.56
79.76%
WOR
Worthington Industries
54.66
-3.29
-5.68%
AZZ Corporate Events
Business Operations and StrategyPrivate Placements and Financing
AZZ Extends Revolving Credit Facility, Lowers Borrowing Costs
Positive
May 8, 2026
On May 7, 2026, AZZ Inc. executed a Seventh Amendment to its existing credit agreement with Wells Fargo Bank and a group of lenders, extending the maturity of its revolving credit commitments to May 7, 2029 and replacing the prior commitments in f...
Dividends
AZZ Declares Fiscal Q4 2026 Cash Dividend
Positive
Apr 9, 2026
On April 9, 2026, AZZ Inc. announced that its board of directors declared a fiscal 2026 fourth-quarter cash dividend of $0.20 per share on its outstanding common stock. The dividend will be paid on May 14, 2026, to shareholders of record as of the...
Business Operations and StrategyExecutive/Board Changes
AZZ Announces Board Leadership Transition and New Directors
Positive
Mar 5, 2026
On February 28, 2026, AZZ Inc. announced a series of board succession moves, including the planned retirement of long-serving director and board chair Dan Feehan at the end of his term in July 2026, in line with the company’s mandatory retir...
Business Operations and StrategyStock BuybackDividendsFinancial DisclosuresM&A Transactions
AZZ Updates Strategy and Performance as Metal Coatings Leader
Positive
Feb 13, 2026
On February 12, 2026, AZZ Inc. released updated investor presentation materials outlining its strategy and recent performance as a focused metal coatings company. The deck highlighted AZZ’s #1 market positions in North American galvanizing a...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.