Stephens has raised its 12-month price target on Griffon Corp to $115.00 from $92.00 and maintained an Overweight rating after the company published fiscal first-quarter 2026 results and announced a strategic joint venture transaction.
Griffon reported quarterly results that outpaced consensus expectations on both earnings and sales. The company recorded diluted earnings per share of $1.45, ahead of the $1.33 analysts had forecast - a beat of 9.02%. Revenue for the quarter came in at $649.1 million compared with a consensus figure of $619.22 million. These outcomes were driven in part by higher CPP international volume and a favorable price/mix in the HBP segment.
On profitability, Griffon posted an EBITDA margin of 20%. That result was slightly below the 20.2% margin implied by analysts and consensus estimates. Management attributed the near-term gap to lower HBP margins resulting from increased costs and lower absorption, which were partially offset by solid margins in the CPP business.
In a material corporate development, Griffon entered into a definitive agreement with private equity firm ONCAP to create a joint venture combining ONCAP’s tools businesses with Griffon’s U.S. and Canada AMES Companies. Under the terms disclosed, Griffon will retain a 43% equity interest in the joint venture.
As consideration tied to the transaction, Griffon will receive $100 million in cash and $161 million in second-lien debt issued by the joint venture. Separately, the company said it has launched a strategic review of CPP’s remaining international AMES businesses and intends to consolidate Hunter Fan into the HBP segment.
Stephens’ updated target is premised on a 12x EV/NTM EBITDA multiple applied to forward estimates and is supported by the firm’s revised sum-of-the-parts valuation. The firm’s model and the price target look 12 months ahead from the guidance stated by Stephens.
Despite the better-than-expected headline results, Griffon’s shares showed a modest decline in premarket trading following the release. The company’s quarter nevertheless demonstrated a degree of operational resilience across segments, with CPP volume improvements and HBP price/mix contributing to the top-line strength.
Context and implications
The joint venture transaction changes Griffon’s capital and ownership position in its tools operations by converting part of the business into a minority stake alongside a private equity partner, while delivering near-term cash and subordinated debt to Griffon’s balance sheet. The announced strategic review of remaining international AMES businesses and the recombination of Hunter Fan into the HBP segment indicate additional portfolio adjustments under consideration by management.
What to watch next
- Progress and terms of the definitive JV closing and any subsequent operational integration.
- Outcomes from the strategic review of CPP’s international AMES businesses.
- Quarterly margin trends for HBP as cost and absorption dynamics evolve.