Advanced Drainage Systems (WMS) will benefit from its planned $1 billion acquisition of National Diversified Sales through greater portfolio balance and growth levers into fiscal 2027 and beyond, Oppenheimer said.

The all-cash deal, valued at about $1 billion, or $875 million after tax benefits, will be funded through cash and existing credit lines. It is expected to be accretive to adjusted earnings per share in the first year and generate more than $25 million in annual cost synergies by year three.

The brokerage said in a Tuesday note that the acquisition expands the company's mix into landscape irrigation, balances residential and non-residential exposure, and enhances its multi-channel strategy. The firm also highlighted favorable tax benefits as a lever to returns and sees further upside potential from synergies as demand improves in fiscal 2027-28.

Oppenheimer raised its price target on the stock to $168 from $165, with an outperform rating, citing the strategic fit of the acquisition and potential for earnings and cash flow upside.

Price: 144.17, Change: -0.17, Percent Change: -0.11