Hayward Earnings: 2023 Outlook Lowered Amid Channel Inventory Destocking and Soft End-Market Demand

We’ve lowered our fair value estimate for narrow-moat-rated Hayward to $14.20 from $14.60 following the firm’s third-quarter earnings release. Management reduced its full-year 2023 outlook and now anticipates adjusted EBITDA of $245 million-$255 million (down from $265 million-$280 million previously), which assumes a 24%-26% net sales decline (down from a 20%-23% decline previously). The fair value reduction reflects our more muted near-term revenue growth projections, partially offset by time value of money.