Key Takeaways
- Myers Industries stock fell as much as 14% Thursday and closed down about 6% after third-quarter revenue rose 8.1% but gross margin fell to 27.3%.
- Demand looks healthy, but Myers’ price increases haven’t caught up with resin costs, so its promised fourth-quarter margin rebound has to show up.
- Higher polyethylene prices lifted Dow’s plastics profits, and Dow expects recent price gains to help its fourth-quarter margins. Advanced Drainage Systems has so far priced ahead of its costs.
- Myers’ only analyst estimate predates this report and looks likely to come down.
Myers Industries (MYE) shares fell as much as 14% Thursday after resin costs outran its prices in the third quarter. Buyers stepped in later, and the stock closed down about 6% at $30. That bounce suggests plenty of investors expect the margin hit to pass.
That spike shows up as profit at Dow (DOW), whose polyethylene prices rose in every region last quarter. And it’s a test for Advanced Drainage Systems (WMS), which also turns plastic resin into its products.
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The details
Revenue rose 8.1% to $171.3 million, led by a 38% jump in Infrastructure and 12% growth in Food & Beverage. Infrastructure growth did cool, though, from 52% in the second quarter. But gross margin fell to 27.3%, and adjusted EBITDA fell 8.2% to $26.6 million. Adjusted EPS dropped 40% sequentially to $0.32.
CEO Aaron Schapper blamed “a significant spike in resin cost and unfavorable product mix.” Myers also cut its 2026 outlook for Vehicle, 13% of sales, to down from stable.
Margins had been on a strong run before this quarter…
Pricing has to catch up
Schapper said on the call that Myers’ price increases take time to show up in full. Resin has since come off its peak, and he expects “significant sequential margin improvement in the fourth quarter.”
Dow was on the right side of the spike. Its Packaging & Specialty Plastics segment raised local prices 17% year over year in the third quarter. So the segment’s operating EBIT nearly tripled to $585 million.
And Dow doesn’t sound like it expects relief. CFO Jeffrey Tate said on Dow’s call that “recent polyethylene price gains should improve our margins” in the fourth quarter. That’s a risk for Myers’ promised rebound.
Advanced Drainage also sells into infrastructure, Myers’ fastest-growing market, and it has priced better. In its quarter to June 30, it raised prices to cover higher material costs and widened its adjusted EBITDA margin 230 basis points to 35.8%. Its early-November report will show whether that held through the September quarter.
Not cheap yet
Myers’ only analyst estimate on TIKR, made in September, calls for normalized EPS of $1.86 this year, up 69% from 2025:
After this quarter’s margin hit, I’d expect it to come down.
And the valuation? Before the report, Myers traded at about 17x forward earnings, above its five-year average of 13.5x:
Thursday’s close leaves it at about 15.5x, still above its average, and that’s on an estimate that looks likely to fall.
My take: the demand is there, and Myers’ pricing should catch up. But with Dow still pushing prices higher, I’d want to see fourth-quarter margins before buying.
Of course, if resin stays put and the price increases stick, today’s drop could look like an overreaction.
So what is Myers Industries stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
