KeyBanc Lowers Price Target for Advanced Drainage Systems but Sees Long-Term Growth Potential

KeyBanc analysts reduced their price target for Advanced Drainage Systems (NYSE:WMS) from $195 to $180, while keeping an Overweight rating on the stock. The adjustment followed the company’s fiscal second-quarter 2025 earnings report, which highlighted challenges in non-residential markets and pressure on margins.

Although fluctuations in non-residential demand were anticipated, the analysts noted that investors appeared concerned with the extent of margin headwinds, largely attributed to higher input costs rather than a decline in top-line pricing. Despite these near-term pressures, KeyBanc views the current dip in share price as an opportunity for investors, given the company’s strong foundation in material conversion and potential for long-term margin improvements.