At first glance, Masco may seem like a surprising stock pick, given today’s lackluster housing market. After all, the company’s sales are driven by residential repair and remodel spending, which surged during the pandemic but stalled in 2023 and hasn’t yet recovered. But on a recent episode of The Morning Filter podcast, 5 Stocks to Buy Before Q2 Heats Up, Morningstar Chief US Market Strategist Dave Sekera named Masco as one of his stock picks, calling it “an interesting play on the housing market.” Given where housing prices and mortgage rates stand, Sekera expects a rebound in home improvement demand as homeowners are more likely to remain in their current homes rather than move. Masco stock is trading at a big discount to our USD 88 fair value estimate.
Repair and remodel spending and, to a much lesser extent, new residential construction are major drivers of Masco’s financial performance. In 2025, repair and remodel spending drove 89% of the company’s sales. Owing to reduced consumer confidence amid uncertain US trade policies and the specter of a recession, we project flat repair and remodel spending in 2026. However, we expect the repair and remodel market to benefit from several long-term secular tailwinds related to aging housing stock and increased acceptance of smart home and energy-efficient products and solutions. Once US consumers gain confidence under more-certain trade policies and healthy economic conditions, we think Masco can consistently deliver mid-single-digit revenue growth and high-teens operating margins.
Key Morningstar Metrics for Masco
- : $88Fair Value Estimate
- : 5 StarsStar Rating
- : WideEconomic Moat Rating
- : MediumUncertainty Rating
Economic Moat Rating
Over the past two decades, the plumbing and decorative architectural segments have comfortably outearned Masco’s cost of capital and have generated most of the company’s economic profits. We believe intangible assets related to plumbing and architectural coatings and the relatively low-cost Behr distribution and sales platform will support excess returns for at least the next 20 years, supporting a wide moat. We believe the Delta and Hansgrohe brands hold pricing power over lower-end brands and imports. And Behr’s reputation for award-winning quality at a reasonable price and its affiliation with and support from Home Depot have built significant brand equity, which commands pricing power even when competitors become more promotional.
Read more about Masco’s moat rating.
Fair Value Estimate for Masco Stock
Our USD 88 fair value estimate equates to 21 times our 2026 adjusted earnings per share estimate and forward enterprise value/EBITDA of 13 times. However, 2026 won’t reflect Masco’s true earnings power due to added tariff costs and a soft US housing market. We forecast low-single-digit growth in the plumbing business and flat paint sales. Overall, we estimate Masco’s revenue may increase by around 2% in 2026. Once the US economy normalizes by 2027, we forecast Masco’s consolidated organic sales will grow at a 6% annual rate through 2034, with another roughly 1% contribution from acquisitions. With added tariff costs, adjusted operating margin slipped to 16.8% in 2025, though we expect it to improve to 17.4% in 2026 as a greater portion of such costs is mitigated. Thereafter, we model operating margin hovering around 18%-18.5% as tariff headwinds subside and the US housing market recovers.
Read more about Masco’s fair value estimate.
Risk and Uncertainty
The most substantial risk we see is a prolonged downturn in repair and remodel spending, which would likely weaken Masco’s financial performance. The company imports USD 450 million worth of goods from China, and with a 145% tariff in place, its annualized incremental tariff exposure would be USD 625 million. Global 10% reciprocal tariffs and duties on steel and aluminum add another USD 50 million. However, with a 30% tariff on China imports, Masco’s latest estimate of incremental tariff costs is USD 210 million. We think management’s plan to mitigate tariff costs by the end of 2026 is credible. Behr’s exclusive distribution agreement with Home Depot introduces significant customer concentration risk. Although we think the company’s acquisition strategy to date has mostly been satisfactory, there is no guarantee that future acquisitions will be as successful.
Read more about Masco’s risk and uncertainty.
Masco Bulls Say
- The repair and remodel market is poised for long-term growth, driven by tailwinds that include aging housing stock and favorable demographics.
- Masco’s growth strategy for its plumbing and decorative architectural segments should support consistent above-market growth.
- Masco’s brands enjoy pricing power, which supports margin stability.
Masco Bears Say
- Repair and remodel spending and new-home construction weakness could persist due to challenging affordability conditions and elevated economic uncertainty, pressuring Masco’s sales growth and profitability.
- Future acquisitions could destroy shareholder value via unfavorable deal terms, integration issues, or subsequent underperformance. The Kichler acquisition struggled and was sold at a steep discount.
- Masco faces formidable competition in each of its segments. Actions taken by rivals could result in lower sales and profitability.
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This article was compiled by Susan Dziubinski and Sylvia Hauser. Data as of March 31, 2026, close unless otherwise noted.
