Builders FirstSource (NYSE:BLDR) Downgraded to "Neutral" Rating by Robert W. Baird

Key Points

• Builders FirstSource has been downgraded from an "outperform" to a "neutral" rating by Robert W. Baird, with a reduced target price of $130, down from $145.
• Despite recent downgrades, the stock has received mixed reviews overall; it holds a consensus rating of "Moderate Buy" and analysts project an average target price of $159.26.
• The company recently announced a $500 million share buyback plan, indicating management's belief that the stock is undervalued.

Builders FirstSource (NYSE:BLDR - Get Free Report) was downgraded by Robert W. Baird from an "outperform" rating to a "neutral" rating in a research report issued to clients and investors on Friday, MarketBeat.com reports. They currently have a $130.00 price target on the stock, down from their prior price target of $145.00. Robert W. Baird's price objective points to a potential downside of 0.14% from the stock's previous close.

Several other research analysts have also recently commented on the stock. Stephens lowered their price target on shares of Builders FirstSource from $145.00 to $140.00 and set an "overweight" rating for the company in a report on Friday, May 2nd. Oppenheimer set a $155.00 target price on shares of Builders FirstSource and gave the stock an "outperform" rating in a research note on Thursday, July 10th. Royal Bank Of Canada reissued an "outperform" rating and issued a $132.00 target price on shares of Builders FirstSource in a report on Thursday, May 15th. Stifel Nicolaus cut their price target on Builders FirstSource from $125.00 to $118.00 and set a "hold" rating on the stock in a research note on Monday, May 5th. Finally, Zelman & Associates restated an "underperform" rating on shares of Builders FirstSource in a research note on Friday, July 18th. One research analyst has rated the stock with a sell rating, eight have issued a hold rating, twelve have assigned a buy rating and one has given a strong buy rating to the company. Based on data from MarketBeat.com, the company presently has a consensus rating of "Moderate Buy" and an average target price of $158.79.

Builders FirstSource Trading Up 2.4%

NYSE BLDR traded up $3.05 on Friday, reaching $130.18. The stock had a trading volume of 3,999,716 shares, compared to its average volume of 1,979,004. The firm has a market capitalization of $14.39 billion, a price-to-earnings ratio of 19.75, a P/E/G ratio of 11.62 and a beta of 1.69. The stock has a fifty day moving average price of $120.51 and a two-hundred day moving average price of $129.10. Builders FirstSource has a 12-month low of $102.60 and a 12-month high of $203.14. 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 (NYSE:BLDR - Get Free Report) last posted its quarterly earnings results on Thursday, July 31st. The company reported $2.38 earnings per share (EPS) for the quarter, beating analysts' consensus estimates of $2.35 by $0.03. Builders FirstSource had a return on equity of 24.61% and a net margin of 4.74%. The company had revenue of $4.23 billion for the quarter, compared to analyst estimates of $4.29 billion. During the same quarter last year, the company earned $3.50 EPS. Builders FirstSource's revenue for the quarter was down 5.0% compared to the same quarter last year. As a group, sell-side analysts forecast that Builders FirstSource will post 11.59 EPS for the current fiscal year.

Builders FirstSource announced that its board has approved a share buyback program on Thursday, May 1st that permits the company to buyback $500.00 million in outstanding shares. This buyback authorization permits the company to reacquire up to 3.9% of its stock through open market purchases. Stock buyback programs are usually a sign that the company's board believes its shares are undervalued.

Insider Transactions at Builders FirstSource

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

Hedge Funds Weigh In On Builders FirstSource

Hedge funds and other institutional investors have recently made changes to their positions in the stock. IMA Advisory Services Inc. purchased a new position in shares of Builders FirstSource during the first quarter worth about $31,000. Sentry Investment Management LLC purchased a new position in shares of Builders FirstSource during the first quarter worth about $40,000. CX Institutional purchased a new position in shares of Builders FirstSource during the first quarter worth about $45,000. AlphaQuest LLC purchased a new position in shares of Builders FirstSource during the second quarter worth about $67,000. Finally, New Age Alpha Advisors LLC purchased a new position in shares of Builders FirstSource during the fourth quarter worth about $74,000. 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.