Builders FirstSource (NYSE:BLDR) Downgraded by Zacks Research to Strong Sell

Key Points

• Zacks Research downgraded Builders FirstSource to “strong sell” from “hold,” although the broader analyst consensus remains “hold,” with nine buy, eleven hold and three sell ratings and an average price target of $90.59.
• The stock opened at $75.40 after rising 4%, but Builders FirstSource recently missed quarterly expectations, reporting adjusted EPS of $1.17 versus $1.25 expected and revenue of $3.86 billion versus $3.91 billion; revenue fell 8.8% year over year.
• The company authorized a $500 million stock buyback, allowing repurchases of up to 5.4% of outstanding shares, while institutional investors collectively own 95.53% of the stock.

Builders FirstSource (NYSE:BLDR - Get Free Report) was downgraded by equities researchers at Zacks Research from a "hold" rating to a "strong sell" rating in a report issued on Monday,Zacks.com reports.

Several other equities analysts have also recently issued reports on the stock. Benchmark decreased their target price on shares of Builders FirstSource from $105.00 to $100.00 and set a "buy" rating for the company in a research note on Thursday, July 23rd. Jefferies Financial Group cut their price objective on shares of Builders FirstSource from $85.00 to $80.00 and set a "hold" rating for the company in a report on Monday, May 4th. UBS Group decreased their price objective on shares of Builders FirstSource from $122.00 to $88.00 and set a "buy" rating for the company in a research report on Friday. Wells Fargo & Company lowered their target price on shares of Builders FirstSource from $85.00 to $65.00 and set an "equal weight" rating on the stock in a research note on Friday, July 31st. Finally, Stephens reduced their price target on Builders FirstSource from $125.00 to $100.00 and set an "equal weight" rating for the company in a report on Monday, April 27th. Nine equities research analysts have rated the stock with a Buy rating, eleven have given a Hold rating and three have issued a Sell rating to the company. Based on data from MarketBeat, the company currently has an average rating of "Hold" and a consensus price target of $90.59.

Builders FirstSource Stock Up 4.0%

Shares of BLDR opened at $75.40 on Monday. The company has a market capitalization of $8.11 billion, a price-to-earnings ratio of 82.86, a PEG ratio of 2.25 and a beta of 1.44. Builders FirstSource has a 52 week low of $65.10 and a 52 week high of $151.03. The stock's 50-day moving average price is $76.91 and its 200-day moving average price is $88.87. The company has a quick ratio of 1.09, a current ratio of 1.79 and a debt-to-equity ratio of 1.14.

Builders FirstSource (NYSE:BLDR - Get Free Report) last announced its quarterly earnings results on Thursday, July 30th. The company reported $1.17 earnings per share (EPS) for the quarter, missing analysts' consensus estimates of $1.25 by ($0.08). Builders FirstSource had a net margin of 0.71% and a return on equity of 11.73%. The company had revenue of $3.86 billion during the quarter, compared to analyst estimates of $3.91 billion. During the same period in the previous year, the firm posted $2.38 earnings per share. The company's revenue was down 8.8% compared to the same quarter last year. On average, sell-side analysts predict that Builders FirstSource will post 3.29 EPS for the current year.

Builders FirstSource announced that its board has initiated a stock buyback program on Thursday, April 30th that permits the company to repurchase $500.00 million in outstanding shares. This repurchase authorization permits the company to repurchase up to 5.4% of its stock through open market purchases. Stock repurchase programs are often an indication that the company's management believes its stock is undervalued.

Hedge Funds Weigh In On Builders FirstSource

Hedge funds and other institutional investors have recently made changes to their positions in the company. Daiwa Securities Group Inc. raised its stake in Builders FirstSource by 0.4% in the 2nd quarter. Daiwa Securities Group Inc. now owns 17,630 shares of the company's stock valued at $2,057,000 after purchasing an additional 78 shares during the last quarter. New Mexico Educational Retirement Board boosted its stake in Builders FirstSource by 2.0% during the 4th quarter. New Mexico Educational Retirement Board now owns 5,100 shares of the company's stock worth $525,000 after purchasing an additional 100 shares during the last quarter. Moors & Cabot Inc. grew its holdings in shares of Builders FirstSource by 1.5% during the fourth quarter. Moors & Cabot Inc. now owns 7,388 shares of the company's stock worth $760,000 after buying an additional 109 shares in the last quarter. Root Financial Partners LLC grew its holdings in shares of Builders FirstSource by 43.6% during the first quarter. Root Financial Partners LLC now owns 372 shares of the company's stock worth $31,000 after buying an additional 113 shares in the last quarter. Finally, CIBC Private Wealth Group LLC raised its position in shares of Builders FirstSource by 5.9% in the third quarter. CIBC Private Wealth Group LLC now owns 2,272 shares of the company's stock valued at $275,000 after buying an additional 126 shares during the last quarter. Hedge funds and other institutional investors own 95.53% of the company's stock.

About Builders FirstSource

Builders FirstSource, Inc is a leading supplier of structural and value-added building products and services to professional contractors, homebuilders and remodelers. The company provides a comprehensive range of materials and prefabricated components that support all phases of residential construction, from site development and framing to finishing and installation.

The company's core offerings include lumber and lumber sheet goods, windows and doors, millwork, roofing and siding, and engineered wood products such as roof and floor trusses.

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