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Benchmark analysts have reiterated a Hold rating on Boise Cascade Company (NYSE:BCC) shares, following the company’s solid fourth-quarter 2024 performance, which aligned with market expectations. Last week, Boise Cascade reported its quarterly results, demonstrating that revenue, EBITDA, and earnings per share (EPS) met the forecasts anticipated by Wall Street.
The company encountered a softer demand in the quarter, attributed to a year-over-year decline in housing starts and typical seasonal patterns. Despite these challenges, Boise Cascade, which maintains a strong financial health score according to InvestingPro analysis, managed to leverage commodity pricing trends favorably against their inventory. This strategic move, supported by a robust current ratio of 3.34x and more cash than debt on its balance sheet, provided some cushion against the broader challenges faced in the market.
Looking ahead, the analysts adjusted their EPS forecasts for the fiscal years 2025 and 2026 to $8.50 and $10.00, respectively. They cited the difficult macroeconomic environment that is expected to continue affecting the company’s performance in the first quarter of 2025 and the entirety of the fiscal year.
The hold rating by Benchmark suggests a neutral stance, indicating that the analysts do not foresee significant stock movement for Boise Cascade in the near term. This outlook is consistent with the company’s recent performance amidst external market pressures.
In summary, while Boise Cascade has managed to meet expectations in the face of a challenging market, the outlook remains cautious with no immediate triggers that might change the current Hold position. Investors are advised to take note of the updated EPS estimates for the forthcoming fiscal periods.
In other recent news, Boise Cascade Company reported its fourth-quarter 2024 earnings, with earnings per share (EPS) of $1.78, slightly exceeding the forecast of $1.77, and revenue meeting expectations at $1.6 billion. Despite these results, the company’s stock price fell by 6.9% in after-hours trading, reflecting investor concerns about future growth. Analysts at Truist Securities and Loop Capital have adjusted their price targets for Boise Cascade, with Truist reducing it from $157 to $134 while maintaining a Buy rating, and Loop Capital lowering it to $140 from $145, also keeping a Buy rating. BMO Capital Markets revised its price target to $122 from $136, maintaining a Market Perform rating due to market uncertainties.
The company’s Building Materials Distribution (BMD) segment margins are expected to decline in the first quarter, though Truist analysts anticipate margins can sustain at around 5% or higher. Boise Cascade’s fourth-quarter performance was marked by a 7% decline in sales for the Wood Products division and a 4% drop in the BMD division. Despite these challenges, the company continues to focus on engineered wood products and expanding its distribution network. DA Davidson also lowered its price target for Boise Cascade to $125 from $155, maintaining a Buy rating, and noted the company’s strong balance sheet with approximately $7 per share in net cash.
Boise Cascade has been active in capital returns, repurchasing approximately 268,000 shares in the fourth quarter and planning further repurchases. The company is balancing share repurchases and potential mergers and acquisitions with the possibility of a special dividend later in the year. Despite the current market headwinds, analysts from Loop Capital see Boise Cascade as a prime early cycle investment opportunity, highlighting the company’s long-term strategy of increasing sales concentration in higher-margin product categories.
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