Research from Water Tower Research, Water Tower Research

Water Tower Research

Water Tower Research is a leading equity research firm that provides research on micro, small and mid cap companies.

Water Tower Research was founded by Wall Street veterans after witnessing a fundamental shift in the investment research industry with the result being a declining knowledge base among investors, a lack of awareness and a shrinking pool of fundamental research being conducted on companies across the small-cap and micro-cap spectrum. The same issues are now increasingly occurring in the mid-cap space. This sea change within the investment community is impacting not only the companies themselves but also current shareholders and potential investors. With significantly less active sell-side sponsorship by Wall Street, a substantial information gap has developed between companies and various constituents in the financial community. The net result is fewer channels for insight and information to flow between companies and investors.

Research from Water Tower Research

Equity Research Firm

Equity Bottom-Up

<div><ul><li>We are initiating coverage of WD-40 Company (NASDAQ: WDFC), a best-in-class global organization that markets multi-purpose maintenance products (MPMPs) under brands including WD-40 and 3-IN-ONE.</li><li>Our FY26E EPS is $6.21, which is conservative, as it represents pro forma growth of 9%, within the company’s guidance range of $6.05-6.35 (+6-11% pro forma).</li><li>We expect operating margin compression of 40 bps, driven by oil-based specialty chemical cost inflation in 4QFY26 and a double-digit increase in SG&amp;A expenses.</li></ul></div>

We are initiating coverage of WD-40 Company (NASDAQ: WDFC), a best-in-class global organization that markets multi-purpose maintenance products (MPMPs) under brands including WD-40 and 3-IN-ONE.Our FY26E EPS is $6.21, which is conservative, as it represents pro forma growth of 9%, within the company’s guidance range of $6.05-6.35 (+6-11% pro forma).We expect operating margin compression of 40 bps, driven by oil-based specialty chemical cost inflation in 4QFY26 and a double-digit increase in SG&amp;A expenses.

WDFC: Initiating Coverage; Clear Growth Strategy, But Input Cost Spike to Affect Gross Margin