Perimeter Solutions: UBS Sees Safe Haven Buy

Perimeter Solutions is positioned for a potential rebound, according to UBS, which has upgraded the fire safety equipment manufacturer to a 'buy' rating with a raised price target of $30, implying approximately 41% upside. The firm is recognized as a potential safe haven as market discussions shift towards volume risk.

Despite a year-to-date stock decline of over 22%, UBS analysts believe this sell-off is excessive, noting Perimeter Solutions' consistent execution and strategic cash deployment into accretive acquisitions. A significant factor in the stock's earlier decline was a substantial variable compensation payment to executives, which is not expected to recur and negatively impact future performance.

Demand for fire retardant gear is anticipated to grow in 2026, with early indicators from the current fire season suggesting this trend. Furthermore, Perimeter Solutions is set to expand its services and product output, bolstered by its recent nearly $700 million acquisition of Medical Manufacturing Technologies. UBS has consequently revised its EBITDA expectations upward by 5% for this year and 9% for 2027.