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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 services for residential construction, repair, and remodeling. With a market cap of $22 billion, Builders FirstSource serves professional homebuilders, sub-contractors, remodelers, and consumers in the U.S. It is expected to release its Q3 earnings before the market opens on Tuesday, Nov. 5.
Ahead of the event, analysts expect Builders FirstSource to report a profit of $3.10 per share, down 26.9% from $4.24 per share reported in the year-ago quarter. The company has surpassed Wall Street’s adjusted EPS projections in each of the past four quarters. Its adjusted EPS for the last reported quarter declined 10% year-over-year to $3.50, surpassing the consensus estimates by 11.5%.
For fiscal 2024, analysts expect Builders FirstSource to report an adjusted EPS of $11.68, down 20% from $14.59 in fiscal 2023. In fiscal 2025, its adjusted EPS is projected to grow 9.2% year-over-year to $12.75.
BLDR has gained 8.2% on a YTD basis, lagging behind the S&P 500 Index’s ($SPX) 22.7% gains and the Industrial Select Sector SPDR Fund’s (XLI) 20.3% returns during the same time frame.
Shares of Builders FirstSource surged 4.1% after the release of its Q2 earnings on Aug. 6 buoying its better-than-expected earnings. The company reported a 1.6% year-over-year decline in net sales to $4.5 billion, marginally falling short of Wall Street’s topline expectations. Additionally, its core organic sales dipped 3.8%, due to the continued downtrend in Multi-Family which was partially offset by growth from acquisitions and Single Family. The company also reported a 15% drop in net income to $344.1 million, due to 121 basis points net margin contraction to 7.7%. However, it surpassed analysts’ adjusted EPS projections by a large margin leading to the surge in stock prices.
The consensus opinion on BLDR stock is bullish, with an overall “Strong Buy” rating. Out of the 16 analysts covering the stock, 11 recommend a “Strong Buy,” one advises a “Moderate Buy,” and four suggest a “Hold” rating. The mean price target of $204 represents a potential upside of 12.9% from current price levels.
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.
