Baird R W Downgrades Builders FirstSource (NYSE:BLDR) to Hold

Key Points

• Baird R W downgraded Builders FirstSource from a "strong-buy" rating to a "hold" rating, indicating a shift in confidence regarding the stock's performance.
• The company has a consensus rating of "Moderate Buy" with an average target price of $158.79, despite mixed ratings from various analysts.
• Builders FirstSource announced a stock buyback program authorized for up to $500 million, suggesting that the board believes the stock is undervalued.

Builders FirstSource (NYSE:BLDR - Get Free Report) was downgraded by equities researchers at Baird R W from a "strong-buy" rating to a "hold" rating in a research report issued to clients and investors on Friday,Zacks.com reports.

A number of other equities research analysts have also recently commented on the stock. Stephens lowered their price objective on shares of Builders FirstSource from $145.00 to $140.00 and set an "overweight" rating on the stock in a research note on Friday, May 2nd. Zelman & Associates reaffirmed an "underperform" rating on shares of Builders FirstSource in a research note on Friday, July 18th. Stifel Nicolaus upped their target price on Builders FirstSource from $118.00 to $128.00 and gave the company a "hold" rating in a research note on Friday. Deutsche Bank Aktiengesellschaft reaffirmed a "hold" rating and issued a $134.00 target price on shares of Builders FirstSource in a research note on Friday. Finally, Oppenheimer set a $155.00 target price on Builders FirstSource and gave the company an "outperform" rating in a research note on Thursday, July 10th. One analyst has rated the stock with a sell rating, nine have assigned a hold rating and twelve have given a buy rating to the company's stock. According to data from MarketBeat.com, Builders FirstSource presently has a consensus rating of "Moderate Buy" and an average target price of $158.79.

Builders FirstSource Stock Performance

NYSE:BLDR opened at $130.18 on Friday. The company has a quick ratio of 1.07, a current ratio of 1.79 and a debt-to-equity ratio of 1.12. Builders FirstSource has a fifty-two week low of $102.60 and a fifty-two week high of $203.14. The stock has a market cap of $14.39 billion, a PE ratio of 19.75, a price-to-earnings-growth ratio of 11.62 and a beta of 1.69. The firm's fifty day simple moving average is $120.51 and its 200-day simple moving average is $129.10.

Builders FirstSource (NYSE:BLDR - Get Free Report) last issued its quarterly earnings data on Thursday, July 31st. The company reported $2.38 EPS for the quarter, beating analysts' consensus estimates of $2.35 by $0.03. The firm had revenue of $4.23 billion for the quarter, compared to analysts' expectations of $4.29 billion. Builders FirstSource had a net margin of 4.74% and a return on equity of 24.61%. The firm's revenue was down 5.0% on a year-over-year basis. During the same period in the prior year, the company earned $3.50 EPS. Analysts expect that Builders FirstSource will post 11.59 earnings per share for the current fiscal year.

Builders FirstSource declared that its Board of Directors has authorized a stock buyback program on Thursday, May 1st that authorizes the company to buyback $500.00 million in outstanding shares. This buyback authorization authorizes the company to repurchase up to 3.9% of its stock through open market purchases. Stock buyback programs are generally an indication that the company's board of directors believes its stock is undervalued.

Insider Activity

In related news, Director Dirkson R. Charles acquired 5,000 shares of the business's stock in a transaction dated Tuesday, May 27th. The shares were acquired at an average cost of $109.67 per share, for a total transaction of $548,350.00. Following the acquisition, the director directly owned 5,000 shares in the company, valued at approximately $548,350. The trade was a ∞ increase in their position. The acquisition was disclosed in a legal filing with the SEC, which is available at the SEC website. Also, Director Paul S. Levy acquired 283,517 shares of the business's stock in a transaction dated Thursday, May 8th. The shares were bought at an average price of $111.21 per share, for a total transaction of $31,529,925.57. Following the completion of the acquisition, the director owned 1,672,687 shares in the company, valued at approximately $186,019,521.27. This trade represents a 20.41% increase in their ownership of the stock. The disclosure for this purchase can be found here. Over the last quarter, insiders have bought 505,000 shares of company stock worth $56,032,120. Insiders own 2.00% of the company's stock.

Institutional Inflows and Outflows

Hedge funds have recently bought and sold shares of the business. IMA Advisory Services Inc. purchased a new position in Builders FirstSource in the first quarter valued at approximately $31,000. Sentry Investment Management LLC purchased a new position in Builders FirstSource in the first quarter valued at approximately $40,000. CX Institutional purchased a new position in Builders FirstSource in the first quarter valued at approximately $45,000. AlphaQuest LLC purchased a new position in Builders FirstSource in the second quarter valued at approximately $67,000. Finally, Mather Group LLC. raised its stake in shares of Builders FirstSource by 19.7% during the first quarter. Mather Group LLC. now owns 595 shares of the company's stock valued at $74,000 after purchasing an additional 98 shares during the period. Hedge funds and other institutional investors own 95.53% of the company's stock.

About Builders FirstSource

Builders FirstSource, Inc, together with its subsidiaries, manufactures and supplies building materials, manufactured components, and construction services to professional homebuilders, sub-contractors, remodelers, and consumers in the United States. It offers lumber and lumber sheet goods comprising dimensional lumber, plywood, and oriented strand board products that are used in on-site house framing; manufactured products, such as wood floor and roof trusses, floor trusses, wall panels, stairs, and engineered wood products; and windows, and interior and exterior door units, as well as interior trims and custom products comprising intricate mouldings, stair parts, and columns under the Synboard brand name.

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