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On Monday, Benchmark analysts adjusted their outlook on TopBuild Corp (NYSE:BLD), reducing the price target to $375 from the previous $445, while retaining a Buy rating on the shares. Currently trading at $305.66, the stock sits near its 52-week low of $295.19, having declined about 17.5% over the past six months. The revision follows TopBuild’s announcement of its fourth-quarter results for 2024 last week, which aligned with consensus expectations in terms of revenue, EBITDA, and EPS.
The company witnessed a modest year-over-year increase in consolidated revenue by approximately 2%, reaching $5.33 billion in the last twelve months, primarily driven by the growth of its Specialty Distribution segment. However, the Installation segment reported flat results, with a slight uptick in single-family growth overshadowed by a significant decline in multi-family projects. According to InvestingPro, TopBuild maintains a "GREAT" financial health score of 3.1 out of 5, with particularly strong marks in profitability and growth metrics.
Benchmark’s analysts provided commentary on the financial performance, indicating that TopBuild’s latest full-year guidance for 2025 suggests sales figures will remain relatively unchanged, barring any potential mergers or acquisitions. Amid the current uncertainty in the industry, Benchmark has revised its earnings estimates for TopBuild, lowering them from $21.50 to $20.50 for the current year and from $23.00 to $21.00 for the following year.
The reduction in both earnings estimates and the price target reflects the cautious stance Benchmark is taking in light of the mixed performance and the uncertain market conditions TopBuild is facing. Despite these adjustments, the firm maintains a positive outlook on the stock, as evidenced by the continued Buy rating.
In other recent news, TopBuild Corp. reported fourth-quarter earnings that exceeded analyst estimates, with adjusted earnings per share reaching $5.13, surpassing the expected $5.03. Revenue for the quarter increased by 2% year-over-year to $1.31 billion, aligning with projections. Despite these positive results, TopBuild’s shares fell as the company’s 2025 revenue guidance disappointed, projecting between $5.05 billion and $5.35 billion, below the consensus of $5.465 billion. The company also forecasted adjusted EBITDA for 2025 to range from $925 million to $1.075 billion.
TopBuild’s recent financial performance included record sales of $5.33 billion for the full year 2024, a 2.6% increase from the previous year. The company completed eight acquisitions, adding $153.1 million in annual sales, and repurchased approximately 2.5 million shares for $966.4 million. In light of these developments, Truist Securities adjusted its price target for TopBuild to $310 from $395, maintaining a Hold rating. The firm cited factors such as a potential contraction in the multi-family sector and pressure on fiberglass pricing as reasons for the revision.
TopBuild’s board authorized a new $1 billion share repurchase program, increasing its total buyback availability to $1.2 billion. The company anticipates ongoing volatility in the residential new construction market throughout 2025. Despite challenges, TopBuild’s CEO, Robert Buck, emphasized the company’s commitment to operational excellence and its unique operating model.
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