RBC Capital analyst Mike Dahl upgraded Beacon Roofing Supply Inc BECN from Sector Perform to Outperform at an increased price target of $94 from $91.
The analyst is bullish on the stock on favorable roofing industry fundamentals, which suggests continued strength in the residential roofing market in the near term, lean inventories, and a robust growth outlook for Q4 FY23 and Q1 FY24.
The analyst now expects Q3 residential volumes of +14% vs. +8% prior, driving sales/day estimate to +11% vs. +8% earlier.
On the other hand, the analyst says that the non-residential is ‘still seeing puts and takes’ around volume and price on de-stocking and difficult comparables and cites a matter of concern for FY24.
Dahl increased sales estimates to $9.05 billion (from $8.85 billion) for FY23, with residential sales growth of +12% (+4% price/+7% volumes) vs. +8% expected earlier. Also, for FY24, he upped sales estimates of $8.95 billion (from $8.76 billion prior vs. $9.15 billion street view).
Dahl raised adj. EBITDA estimates to $921 million (from $885 million, vs. street view of $883 million) for FY23 and $879 million (from $852 million vs. consensus of $914 million) for FY24.
The analyst also boosted Q3 estimates for sales to $2.65 billion (from $2.56 billion earlier, vs. street view of $2.58 billion and adj. EBITDA estimates to $319 million (from $301 million) vs. the consensus of $296 million.
Also Read: Beacon Roofing Raises $500M Through Debt Offering
Price Action: BECN shares are trading higher by 0.86% at $75.90 on the last check Thursday.
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https://www.benzinga.com/analyst-ratings/analyst-color/23/10/35111645/this-beacon-roofing-analyst-sees-the-stock-touching-roof-on-strong-residential-mark
