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Investing.com - QXO Inc (NASDAQ:QXO) received a Buy rating from Citi as the investment bank initiated coverage on the building products distributor with a $33.00 price target, representing a 57% potential return. Currently trading at $21.15, the stock has shown strong momentum with a 54% gain over the past six months, despite being down 61% year-over-year. According to InvestingPro data, analysts’ price targets range from $27 to $44, with a unanimous Buy rating.
Citi analyst Anthony Pettinari cited a "unique opportunity to roll-up the highly fragmented Building Products distribution market" as the primary reason for the bullish outlook on the company.
The analyst highlighted QXO Chairman and CEO Brad Jacobs’ track record of value creation, noting he has founded and led six publicly traded companies, including two that ranked among the 10 best-performing stocks of the last decade.
Citi views the building products sector as "ripe for consolidation" and expects Jacobs to apply his "proven playbook to a highly fragmented space that lags in tech adoption and innovation."
The bank projects a 30% sales compound annual growth rate from 2026-2030 led by mergers and acquisitions, with sales potentially reaching approximately $33 billion by 2030 and a doubling of Beacon’s organic earnings.
In other recent news, QXO, Inc. announced a $2 billion common stock offering, with the option for underwriters to purchase an additional $300 million in shares. The offering, priced at $22.25 per share, is set to raise significant capital for QXO, which plans to use the proceeds for general corporate purposes, potentially including future acquisitions. Goldman Sachs, Morgan Stanley (NYSE:MS), and Wells Fargo (NYSE:WFC) Securities are acting as underwriters for this offering. Truist Securities initiated coverage on QXO with a Buy rating, highlighting the company’s consolidation strategy in the fragmented building products distribution sector as a key positive factor. The firm noted CEO Brad Jacobs’ successful track record in similar consolidations and emphasized QXO’s growth potential from $10 billion to $50 billion in sales. Additionally, QXO appointed Eric Nelson as its new chief information officer. Nelson brings experience from his previous roles at The Kraft Heinz (NASDAQ:KHC) Company, where he led global IT strategy and operations. These developments reflect QXO’s strategic focus on growth and expansion in the building products industry.
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