Medline Industries: North America: Buying the 2027 Clarity

MDLN 3Q26 beat and 2026 guidance maintained should assuage some investor concerns, alongside early 2027 commentary that seems to set a reasonable bar. 3Q EBITDA exceeded plan (excl. tariff refund benefits) with 2026 guidance maintained, which we view as a clearing event given concerns that macro headwinds would lead to another guidance cut. Mgmt. expects to be ~at the midpoint ($3.35B 2026 EBITDA), implying ~$892M in 4Q EBITDA (+10% y/y), slightly below consensus ~$910M (+13% y/y). For 2027, it is calling for EBITDA +LSD-MSD%, implying ~$3.45B vs. consensus ~$3.67B, or ~$200M below consensus — relatively in line with what investors were contemplating, offering some relief. Mgmt. confirmed the prior ~$340M of costs outlined at 2Q should be disregarded in the 2027 framework, and reaffirmed its long-term EBITDA framework of growth at or above sales growth, which it expects to achieve in 2028. MDLN will implement greater than standard price increases in 1Q27 to offset inflationary pressure