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Oppenheimer initiated coverage on QXO Inc (NASDAQ:QXO) Wednesday with an Outperform rating and a $27.00 price target following the company’s acquisition of Beacon Roofing Supply (NASDAQ:BECN). According to InvestingPro data, QXO has demonstrated strong momentum with a 17% return over the past week and maintains a "GOOD" overall financial health rating.
The research firm views Beacon as a favorable "original building block" for QXO, which aims to become a $50 billion revenue leader in building products distribution. Beacon brings a broad North American network to QXO and maintains leadership positions across its distribution categories. With analysts forecasting 128% revenue growth for fiscal year 2025, QXO appears positioned for significant expansion.
Oppenheimer highlighted Beacon’s roofing business as relatively resilient due to its "elevated mix of non-discretionary repair and re-roofing revenue," providing stability to QXO’s newly acquired operations.
QXO plans to organically double Beacon’s adjusted EBITDA to $2 billion by 2030 through "multiple, largely technology-advanced, operational enhancement initiatives," according to Oppenheimer’s analysis of the company’s strategy.
The research firm estimates QXO will achieve $4.5 billion in total adjusted EBITDA by 2030, combining organic growth with additional acquisitions as the company continues its expansion in the building products distribution sector.
In other recent news, QXO, Inc. has reported several significant developments. The company finalized its acquisition of Beacon Roofing Supply, Inc. for approximately $11 billion, making it the largest publicly traded distributor of roofing and related products in the U.S. This acquisition is a key part of QXO’s strategy to become a tech-enabled leader in the building products distribution industry, with a target of achieving $50 billion in annual revenues within the next decade. Additionally, QXO announced concurrent public offerings of common stock and depositary shares, aiming to raise $1 billion, with potential for an additional $150 million through over-allotments. The proceeds are intended for debt repayment and future acquisitions. Wolfe Research initiated coverage on QXO with an Outperform rating and a $44 price target, citing the company’s potential for superior EBITDA growth. Furthermore, QXO has filed a prospectus supplement for the resale of over 67 million shares of common stock by certain stockholders. In another development, QXO has integrated with Roofr to provide real-time pricing and streamline workflows for roofing contractors. These recent developments highlight QXO’s active pursuit of growth and expansion in the building products sector.
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