BMO Capital has downgraded Mister Car Wash Inc. (NASDAQ:MCW) from Outperform to Market Perform and lowered its price target to $7.00, citing the company’s recently announced transaction with Leonard Green & Partners. The revised target matches the $7 per share all-cash offer that values the remaining minority stake at $764.9 million.
The stock was trading at $6.98 at the time of BMO’s note, nearly equal to the new target after climbing 18.51% in the prior week. The share price has delivered year-to-date gains of 25.54% heading into the transaction announcement.
BMO expects the Leonard Green deal to close in the first half of 2026 and has reduced its prior $9 price target to mirror the $7 offer price. The analyst framed the valuation as reasonable - roughly 15 times next-twelve-months earnings - in light of continued pressure on retail car wash volumes and the need to reinvest cash flow back into the business.
At present, Mister Car Wash trades at a P/E of 19.39. InvestingPro data referenced in market commentary shows the company’s PEG ratio at 0.47, indicating the shares are trading at a relatively low price-to-earnings multiple when compared with near-term earnings growth expectations.
The downgrade by BMO occurred alongside corporate news that Leonard Green & Partners has entered an agreement to acquire the outstanding 33% minority interest in Mister Car Wash for $764.9 million, or $7.00 per share. That transaction is part of a broader $3.1 billion take-private merger agreement under which Leonard Green will purchase the remaining public shares for $7.00 each.
The $7 per share deal represents a 29% premium to the company’s volume-weighted average share price over the 90 days prior to the announcement. Leonard Green already owned approximately 67% of Mister Car Wash outstanding shares and has been a strategic partner with the company since 2014.
Market reactions included other analyst adjustments. Guggenheim downgraded its rating on Mister Car Wash from Buy to Neutral, citing the take-private transaction as a factor in its reassessment. Separately, Moody’s Ratings upgraded the company’s outlook from stable to positive. Moody’s cited improved operating performance, including positive same-store sales growth and rising club membership counts, as grounds for the revised outlook.
Those operational improvements were reported at the same time Mister Car Wash disclosed better-than-expected results for the fourth quarter of 2025. The company remains profitable on a trailing twelve-month basis, with diluted earnings per share of $0.31.
Investors and analysts noted the company’s stock has traded consistently below its initial public offering price of $15 since 2021, a factor referenced by firms reassessing ratings in light of the buyout proposal and the company’s recent performance. BMO’s repositioning reflects both the takeover price and the firm’s view of underlying retail pressures that may require reinvestment into operations over the coming periods.
What this means
The BMO adjustment brings the firm’s public-facing valuation in line with the cash offer, signaling a shift from an Outperform stance to a more neutral posture as the transaction progresses. With the deal expected to close in the first half of 2026, publicly traded shareholders may see limited upside beyond the $7 offer unless circumstances change.