Advanced Drainage Systems (WMS) is likely to set a high-single-digit 2029 revenue compound annual growth rate guidance at its upcoming investor day, supported by organic growth and a path toward EBITDA margin expansion as inflationary pressures moderate, RBC Capital Markets said in a research report emailed Monday.

RBC said it lowered its 2027 EPS estimate by $0.15 to $6.35, but raised its 2028 EPS forecast by $0.20 to $7.25.

As investors focus on the cost synergy target related to the company's acquisition of water management business National Diversified Sales, revenue synergy opportunity also looks attractive, according to the note.

The amended stormwater and wastewater reporting structure should offer investors more transparency into how management oversees the company post-merger, according to RBC.

The company could deploy over $2.5 billion through fiscal 2029 as it prioritizes bolt-on acquisitions alongside organic reinvestments and stock repurchases, according to the brokerage.

The brokerage said it reiterated its outperform rating on the stock and boosted its price target to $170 per share from $168 earlier.

Price: 131.05, Change: +0.90, Percent Change: +0.69