This fire safety stock is in the dumps. UBS says it’s time to buy
Perimeter Solutions could be due for a bounce as the company capitalizes on increasing demand for fire retardant gear and its recent acquisition, according to UBS. The investment bank upgraded the manufacturer of fire safety equipment to buy from neutral. It also raised its price target on shares to $30 from $26, implying roughly 41% upside from Monday’s close. Perimeter has struggled this year, losing more than 22%. PRM YTD mountain PRM year to date But, “as conversations in our coverage have shifted from price/cost opportunities to volume risk, we think PRM stock could be an overlooked safe haven,” analyst Joshua Spector said in a note to clients. “We see the stock sell off as overdone … as PRM has continued to execute well and deploy cash into accretive acquisitions.” A major driver of the fire safety and specialty products firm’s selloff this year was a large variable compensation payment to its executives, according to UBS. But, that shouldn’t continue to drive investors away from the stock. “The high water mark for future payments is near ~$28/sh (~30% upside), which we think provides enough upside to interest investors (dilution baked into our $30 PT),” Spector wrote. The analyst added that fire retardant demand is likely to grow in 2026, based on some early signs at the start of the fire season. The company is also poised to grow its services, in addition to increasing its product output due to its recently completed acquisition of Medical Manufacturing Technologies that was valued at nearly $700 million. As a result, UBS raised its EBITDA expectations for Perimeter to 5% and 9% for this year and 2027, respectively. “The business attributes seem favorable with high margins/returns, low capex , ~50% aftermarket,” Spector wrote. Wall Street is split on Perimeter Solutions. Of the two analysts covering the stock, one has a hold on shares, while the other has a buy on them. Perimeter stock is down nearly 23% since the beginning of the year. However, shares are still up 11% over the past 12 months.