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Monday, Builders FirstSource (NYSE:BLDR) stock received a revised price target from Stifel analysts, now set at $118, down from the previous $125, while the firm retained a Hold rating on the shares. The adjustment follows the company’s first-quarter earnings for 2025, which included a reduction in guidance and a softer outlook for the second quarter of the year. According to InvestingPro data, the stock has declined over 36% in the past six months, with analyst targets ranging from $118 to $190.
Stifel’s analysis indicates that the revised guidance and outlook for the upcoming quarter were as concerning as anticipated, with the lack of certainty failing to alleviate concerns about a potential negative revision cycle. The analysts noted that although the current competitive pressure on margins is likely unsustainable, it remains a significant factor in the current market conditions. The company maintains a healthy gross profit margin of 32.2% and trades at a P/E ratio of 14.6x, according to InvestingPro data.
Builders FirstSource’s volume outlook continues to be weak, and despite the challenges, Stifel acknowledges the company’s long-term potential. The analysts are on the lookout for signs of market improvement but have set their full-year 2025 earnings outlook just below the midpoint of the company’s revised guidance. This stance anticipates a substantial improvement in the second half of the year, which is necessary to reach Stifel’s projections for 2026 and 2027. InvestingPro analysis shows 14 analysts have revised their earnings downwards for the upcoming period, though the company maintains strong liquidity with a current ratio of 1.82.
Stifel’s commentary reflects a cautious stance, emphasizing the need for an upturn in the latter part of the year to meet future earnings expectations. The firm’s current position aligns with a neutral approach due to the prevailing uncertainties, as they remain watchful for any positive changes in the market that could affect Builders FirstSource’s performance. With a market capitalization of $12.46 billion and expected EPS of $8.80 for fiscal year 2025, investors seeking deeper insights can access comprehensive analysis and 10+ additional ProTips through InvestingPro’s detailed research reports.
In other recent news, Builders FirstSource reported its first-quarter 2025 earnings, surpassing Wall Street expectations. The company achieved an adjusted earnings per share (EPS) of $1.51, exceeding the forecasted $1.42. Despite a 6% decline in net sales year-over-year, the company posted a revenue of $3.7 billion, slightly above the anticipated $3.67 billion. Builders FirstSource has also announced a $500 million offering of unsecured Senior Notes due in 2035, aimed at repaying existing debt under its Asset-Based Lending Facility. In the realm of mergers, the company completed two acquisitions in the first quarter with combined prior year sales of roughly $565 million, including Alpine Lumber and OC Plus. Additionally, Builders FirstSource has projected net sales between $16.05 billion and $17.05 billion for 2025. Furthermore, the company has been focusing on digital sales growth and productivity savings, with a target of $70-$90 million in savings for the year. Analyst firms have not reported any recent upgrades or downgrades, but the company’s strategic initiatives and financial performance remain under scrutiny.
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