New York, February 4, 2026, 15:09 EST — Regular session
Shares of Zurn Elkay Water Solutions Corporation climbed 11.6% to $52.52 in afternoon trading Wednesday, hitting an intraday peak of $52.74. The stock gained $5.46 on the day, with roughly 1.7 million shares changing hands.
This move is significant since investors tend to dump building-products stocks whenever pricing power wavers or demand slows. Zurn Elkay’s update came right in the thick of that selling pressure.
This is also a cash story. Firms that maintain steady margins while generating solid cash flow usually get rewarded quickly once sentiment shifts even a bit toward caution.
Late Tuesday, the Milwaukee-based water-management products maker reported Q4 net sales of $407 million, up from $371 million a year ago, with adjusted earnings hitting 36 cents per share. Adjusted EBITDA climbed to $104 million. CEO Todd Adams highlighted record results for 2025 and a year-end net debt leverage ratio of just 0.4x.
The company projects mid-single digit core sales growth for 2026, with incremental adjusted EBITDA margins near 35% and free cash flow around $335 million. For Q1, it forecasts core sales growth between 7% and 8%, and adjusted EBITDA margins in the 25.5% to 26.0% range. It also noted that its 2025 sustainability report will be released “in the coming weeks.” SEC
Core sales serve as the company’s “organic” benchmark, designed to exclude acquisition and currency impacts. Incremental margin measures the portion of each additional dollar in sales that flows through to profit — a straightforward gauge of operating leverage.
Other plumbing and building-products stocks also climbed, but none matched Zurn’s leap. Fortune Brands Innovations jumped roughly 7%, Watts Water Technologies edged up close to 2%, and Advanced Drainage Systems rose around 3%.
The bid also reveals investor sentiment on the early-2026 outlook. Should cash remain robust, buybacks and balance-sheet flexibility will help carry the load, even if volume growth wavers.
But with the rally underway, there’s little margin for slip-ups. Should commercial construction falter or price gains stall sooner than anticipated, margins could compress rapidly, and cash flow might suffer from typical working-capital fluctuations.
Macro factors continue to weigh on the market, particularly anything that shifts rate expectations. The U.S. Bureau of Labor Statistics announced the delayed January jobs report will drop next Wednesday, while the January CPI release is pushed to next Friday following a three-day government shutdown.
Advanced Drainage Systems will report before the bell on Thursday, February 5, per Kiplinger’s earnings calendar. Investors will be watching for clues on construction-related demand.
