Builders FirstSource (BLDR) faces a prolonged downturn due to slowing single-family housing starts, gross margin pressure in H2 of 2025 and a muted 2026 setup, RBC Capital Markets said in a note emailed Friday.
The firm reduced its full-year sales forecast to $15.19 billion from $16.38 billion because of ongoing softness in demand and reduced building activity.
"With leverage above target, there is less potential support from near-term capital deployment," RBC said. This removes a potential catalyst for the stock while fundamentals remain under pressure.
The firm said it expects long-term earnings growth and structural margin strength, but short-term headwinds in volume and pricing are expected to keep Builders' stock rangebound.
RBC downgraded its rating to sector perform to outperform and reduced the price target to $129 from $132.
Price: 125.98, Change: -1.15, Percent Change: -0.90
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.