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On Tuesday, Barclays (LON:BARC) analysts raised the price target for Core & Main Inc. (NYSE: CNM) stock to $69 from the previous $65, while maintaining an Overweight rating. The analysts expressed confidence in the company’s long-term prospects, citing its in-line EBITDA and top-line performance, along with reaffirmed fiscal year guidance.
The analysts highlighted that Core & Main’s recent performance showed resilience, even as the company’s stock slightly underperformed the S&P 500 on Tuesday. This underperformance was attributed to higher expectations following Ferguson’s earnings results last week. Despite this, Core & Main had outperformed the S&P 500 by 9% at that time.
Barclays noted that Core & Main’s guidance for market growth in the first half of the year, followed by a decline in the second half, was based on macroeconomic conservatism. They appreciated the company’s cautious approach to pricing, indicating that flat pricing "at worst" for the year reflects a conservative stance. Additionally, they acknowledged higher-than-anticipated SG&A expenses in the first quarter, attributing it to the integration of prior acquisitions.
The analysts believe that Core & Main is well-positioned for 2025, with potential gains from municipal and infrastructure spending, along with continued gross margin improvements. They anticipate that the stock’s valuation will benefit from increased confidence in earnings potential, supporting their new price target.
In other recent news, Core & Main Inc. reported its Q1 2025 financial results, revealing earnings per share of $0.52, which aligned with analyst expectations. The company achieved a revenue of $1.9 billion, surpassing the anticipated $1.85 billion, marking a 10% year-over-year increase in net sales. Additionally, Core & Main announced plans to open 5-10 new locations in 2025, reflecting its ongoing expansion strategy. The company’s financial outlook for the year includes a net sales guidance of $7.6 to $7.8 billion and an adjusted EBITDA range of $950 to $1,000 million. Analysts noted that the company continues to benefit from strong municipal construction activity and funding from the Infrastructure Investment and Jobs Act. Core & Main’s robust acquisition pipeline remains active, with ongoing evaluations of potential targets. The company also highlighted its focus on mergers and acquisitions as a key growth strategy, with over 40 acquisitions completed since 2017. Analyst firms such as Barclays and Baird have shown interest in the company’s strategic plans and financial performance, indicating a positive reception to its recent developments.
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