Home improvement and building products company Masco Corp (NYSE:MAS) was lifted to Buy from Hold with its price target raised to $65 from $55 by Jefferies analysts on Friday.
The analysts explained that with the stock lagging the builders and shares trading at pre-COVID levels, they believe a quality branded building products company like MAS is due for a catch-up trade.
"Our upgrade of MAS is not without risk in an uncertain macro backdrop, but with the stock lagging the builders & trading at pre-COVID levels, we believe a quality branded building products company like MAS is due for a catch-up trade," said the analysts.
They also explained that when the Fed signals it's done raising rates and they start fading, it would improve housing affordability and "could lead to a quick recovery in R&R & new construction activity, with the industry under building this cycle by 2-5 mil homes & aging housing stock."
"Even in a recession, lower rates could position resi to come out of a downturn sooner than most sectors. As sentiment improves in housing, we see longer-term investors gravitating to quality names like MAS," the analysts added.