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Morgan Stanley analyst Joshua Pokrzywinski lowered the firm's price target on Advanced Drainage to $110 from $120 and keeps an Overweight rating on the shares following what the firm identifies as the company's "second miss and guidance cut in a row." However, the demand bear case has "essentially played out" and the key focus now is a valuation that "has derated considerably" and margins, which the firm believes should remain resilient.

Deutsche Bank analyst Joe Ahlersmeyer raised the firm's price target on Advanced Drainage to $147 from $140 and keeps a Buy rating on the shares after reporting its Q3 results. The company's Q3 adjusted EBITDA was $169M, which was below the consensus but in-line with the firm's $170M estimate, the analyst tells investors. Sales also fell by approximately 8%, impacted by a weaker December with headwinds in both residential and non-residential end markets. Around the past few earnings reports, the stock has been "particularly volatile," but the firm sees year-to-date share performance as appropriate. Deutsche Bank believes the stock's set up remains bullish and believes the last six months of revisions to FY24 has "gone too far."

Loop Capital analyst Garik Shmois lowered the firm's price target on Advanced Drainage to $118 from $125 after its Q3 earnings miss and guidance cut but keeps a Buy rating on the shares. The company reduced its sales and EBITDA outlook as sales trends slowed more than expected in December, but despite the weaker sales outlook, segment gross margins were stronger than expected, reflecting its positive price/cost dynamic, the analyst tells investors in a research note. The firm adds that while the demand catalysts are limited over the next few quarters, the stock's pullback yesterday was a bit excessive when considering that the company should still outperform the broader nonresidential and residential markets.