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Irving, Texas-based Builders FirstSource, Inc. (BLDR) is the largest U.S. supplier of building products, prefabricated components, and value-added residential construction, repair, and remodeling services. With a market cap of $20 billion, Builders FirstSource serves professional homebuilders, sub-contractors, remodelers, and consumers in the US.
Builders FirstSource has underperformed the broader market over the past year. Over the past 52 weeks, BLDR gained 22.4%, while the broader S&P 500 Index’s ($SPX) has soared 28.1% returns. In 2024, BLDR dipped 1.7%, compared to SPX’s 17.3% gains on a YTD basis.
Narrowing the focus, BLDR has significantly underperformed the Homebuild & Suppliers Bull 3X Direxion’s (NAIL) 91.3% returns over the past 52 weeks and 18.9% gains on a YTD basis.
Shares of Builders FirstSource surged 4.1% following the release of its Q2 earnings on Aug. 6. Despite a 1.6% dip in net sales to $4.5 billion and a 15% decrease in net income to $344.1 million, Builders FirstSource surpassed the consensus EPS estimates by 11.5% to $3.50 per share. Moreover, the announcement of a new $1 billion share repurchase plan, following $983.3 million in repurchases during the previous quarter, underscored its strong commitment to returning value to shareholders.
For the current fiscal year, ending in December, analysts expect Builders FirstSource’s EPS to drop 19.3% year over year to $11.77. However, the company’s earnings surprise history is robust. It beat the consensus estimates in each of the last four quarters.
Among the 16 analysts covering the BLDR stock, the consensus rating is a “Moderate Buy.” That’s based on 10 “Strong Buy” ratings, one “Moderate Buy,” and five “Holds.”
This configuration is slightly less bullish than three months ago when 11 analysts recommended “Strong Buys.”
On Aug. 8, Stifel analyst Stanley Elliott maintained a “Buy” rating on BLDR stock and adjusted the price target to $195.
BLDR’s mean price target of $181.56 represents a premium of 10.6% from current price levels. The street-high target of $200 indicates a potential upside of 21.8%.
On the date of publication, Aditya Sarawgi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
