Core & Main, Inc. (CNM): A Bull Case Theory

Core Thesis - Core & Main, Inc. (CNM) is positioned to benefit from increased public-sector infrastructure spending, especially with expectations of lower interest rates stimulating municipal projects [2][3][4] Company Overview - Core & Main is a leading distributor of essential infrastructure products such as pipes, valves, meters, and fittings, serving municipalities, contractors, and select water utilities [2] - As of January 29th, CNM's share price was $54.19, with trailing and forward P/E ratios of 24.21 and 21.83 respectively [1] Investment Catalysts - The investment from Congressman Michael McCaul's household, amounting to $250,000–$500,000, has drawn attention to CNM's fundamentals and potential growth [2] - Expectations of the Federal Reserve cutting interest rates are anticipated to lower financing costs, thereby increasing demand for CNM's products [3] - The company's business model is closely tied to public-sector infrastructure spending, which is expected to expand as borrowing costs decrease [2][3] Financial Performance - Core & Main has demonstrated steady mid-single-digit growth and generates approximately $600 million in free cash flow, showcasing high cash conversion compared to peers [3] - The company maintains a resilient core business even amid rate headwinds, with easing financial conditions likely to enhance performance further [4] Valuation Outlook - A 2–3 year price target of around $85 suggests significant upside potential as infrastructure spending cycles strengthen [4]