Overview

• Water and energy systems producer's Q4 net sales rose 4% yr/yr but missed expectations

• Q4 operating income increased 20% yr/yr, with operating margin of 10.2%

• Company terminated US Pension Plan, incurring $54.9 mln pre-tax settlement charge

Outlook

• Company expects full-year 2026 sales between $2.17 bln and $2.24 bln

• Franklin Electric projects 2026 adjusted diluted EPS between $4.40 and $4.60

• Company focuses on driving profitable growth and expanding margins

Result Drivers

• PRICE REALIZATION AND ACQUISITIONS - Water Systems sales growth driven by price realization and acquisitions

• HIGHER VOLUMES - Distribution and Energy Systems segments saw sales increases due to higher volumes

• STRATEGIC INITIATIVES - Co attributed full year growth to effective pricing, transformation initiatives, and strategic investments

Key Details

Metric	Beat/Miss	Actual	Consensus Estimate
Q4 Sales	Miss	$506.90 mln	$516.17 mln (5 Analysts)
Q4 EPS		$0.87
Q4 Operating income		$51.60 mln

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 2 "strong buy" or "buy", 3 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the industrial machinery & equipment peer group is "buy"

• Wall Street's median 12-month price target for Franklin Electric Co Inc is $113.50, about 4.2% above its February 13 closing price of $108.94

• The stock recently traded at 23 times the next 12-month earnings vs. a P/E of 20 three months ago

Press Release: ID:nGNX57GDGW

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