AZZ Q3 EPS of $1.52 Tops Estimates, Revenue Up 5.5% with $20M Buyback
AZZ reported Q3 FY2026 EPS of $1.52, beating estimates by $0.09, with revenue rising 5.5% to $425.7 million on a 15.7% gain in Metal Coatings sales. It repurchased $20 million of stock, cut $35 million of debt and generated $79.7 million in operating cash flow.
1. Institutional Ownership Shifts
Asset Management One Co. Ltd. reduced its position in AZZ Inc. by selling 4,444 shares during the third quarter, lowering its stake to 54,907 shares valued at $5.99 million, or 0.18% of the company. Several other institutional investors initiated or expanded positions: SG Capital Management LLC opened a $16.82 million stake in Q2; Pacer Advisors Inc. added $16.36 million in Q3; Copeland Capital Management LLC invested $15.77 million in Q3; Allspring Global Investments Holdings LLC and Speece Thorson Capital Group Inc. acquired new stakes of $11.70 million and $7.91 million respectively in Q2. Together, institutional and hedge fund ownership stands at 90.93%, underscoring strong professional interest in AZZ’s industrial products business.
2. Analyst Ratings and Price Targets
Wall Street analysts have recently adjusted their views on AZZ. B. Riley raised its price target from $131 to $140 and maintained a Buy rating on September 17. Wall Street Zen downgraded the stock from Buy to Hold on September 13. Wells Fargo cut its target from $128 to $121 but kept an Overweight rating on October 10. Weiss Ratings reaffirmed its Buy (b) stance on December 29. Among ten analysts, one assigns a Strong Buy, six a Buy and three a Hold, resulting in a consensus Moderate Buy rating and an average price objective of $116.33.
3. Q3 Fiscal 2026 Earnings and Operational Metrics
In the quarter ended November 30, 2025, AZZ reported EPS of $1.52, surpassing consensus estimates of $1.43. Revenue rose 5.5% year-over-year to $425.8 million, beating forecasts of $413.0 million, driven by strong Metal Coatings segment performance. Net margin reached 19.89% and return on equity was 14.85%. Adjusted EBITDA totaled $91.2 million, or 21.4% of sales. Year-over-year comparisons show EPS up from $1.39 and revenue climbing from $403.5 million in Q3 2025. Management set full-year 2026 EPS guidance at a range of $5.90 to $6.20.
4. Capital Allocation and Dividend Policy
During Q3, AZZ repurchased approximately 201,416 shares for $20 million and reduced debt by $35 million, bringing year-to-date debt reduction to $325.4 million and net leverage to roughly 1.6x. Operating cash flow grew 20% to $79.7 million. The board declared a quarterly dividend of $0.20 per share, payable February 26 to holders of record on February 5, implying a $0.80 annualized payout and a yield of about 0.7%. The dividend payout ratio remains conservative at 7.69%, reflecting ample coverage from earnings and cash flow.