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On Wednesday, DA Davidson analyst Kurt Yinger revised the price target for Boise Cascade Company (NYSE:BCC) shares, reducing it from $125.00 to $115.00, while reaffirming a Buy rating on the stock. Currently trading at $87.48, near its 52-week low of $84.53, InvestingPro analysis suggests the stock is undervalued. Yinger’s assessment followed the company’s first-quarter 2025 results and second-quarter outlook, which indicated a softer quarter but more constructive trends going forward.
The analyst noted that most key items are showing positive trends against the current backdrop, despite a generally depressed commodity pricing environment. The primary concern remains the pricing of Engineered Wood Products (EWP), where it is still premature to predict a bottom in realizations. This factor is seen as a critical determinant of the stock’s near-term performance.
Yinger also highlighted the impact of a major modernization project causing downtime at the Oakdale facility. This downtime is expected to contribute to year-over-year pressures for the entirety of 2025 but should resolve in the second half of the year. Despite these challenges, there are several encouraging signs, such as EWP volume trends outpacing single-family starts activity and potential improvements in commodity-related segments following the recent announcement of two plywood facility closures.
Boise Cascade’s Building Materials Distribution (BMD) results have remained stable, with momentum in higher-margin doors and millwork operations. The company’s solid free cash flow (FCF) and a strong net cash position are poised to support attractive returns to shareholders. According to InvestingPro data, the company maintains a healthy current ratio of 2.82 and offers a significant 6.68% dividend yield. With more cash than debt on its balance sheet and an impressive financial health score, Boise Cascade demonstrates robust financial management. In light of these factors, Yinger has adjusted the price target to $115, which corresponds to 8.5 times and 7 times the estimated EBITDA for 2025 and 2026, respectively.
Looking ahead, the analyst projected that as capital spending levels normalize post-2026, Boise Cascade’s FCF generation could increase to between $300 million and $350 million, representing an approximate 10% yield at current prices. Trading at a P/E ratio of 11.51 with an EBITDA of $556.88 million, the company shows strong fundamentals. InvestingPro subscribers can access 12 additional key insights and a comprehensive Pro Research Report, part of the platform’s coverage of 1,400+ US stocks. Despite the downward adjustment in the price target, the Buy rating reflects continued confidence in the stock’s value proposition.
In other recent news, Boise Cascade LLC reported its first-quarter 2025 earnings, which revealed an earnings per share (EPS) of $1.06, missing the analyst forecast of $1.47. Despite the EPS miss, the company exceeded revenue expectations, reporting $1.54 billion against a forecast of $1.53 billion. This mixed performance is attributed to strong sales in the Building Materials Distribution segment, although overall consolidated sales declined by 7% year-over-year. The company’s net income also saw a significant drop to $40.3 million compared to $104.1 million in the same quarter of the previous year. Boise Cascade maintains a cautious outlook on the housing market, anticipating flat to declining performance for the remainder of 2025. The company is continuing with its modernization and expansion projects, with new facilities expected to come online in the coming years. Analyst firms such as Goldman Sachs and D.A. Davidson have been actively engaging with Boise Cascade, focusing on competitive dynamics and inventory management strategies. Boise Cascade’s leadership emphasized their strategic focus on execution and service, assuring stakeholders of their preparedness to respond to changing economic conditions.
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