Benchmark Reiterates Buy Rating on Quanex Building Products (NX) Following Challenging Q2

Benchmark analyst Reuben Garner reiterated a Buy rating and $28.00 price target on Quanex Building Products (NYSE: NX).

The analyst commented, "Following a challenging 2Q26 in which the outbreak of the Iran War sent inflationary shockwaves through the company’s supply chains, we’re taking a second look at those same factors ahead of Quanex Building Products Corp. 3Q26 results next week. Accounting for more than half of the company’s COGS, last quarter’s rapid cost increases resulted in significant margin contraction for Hardware Solutions (the company’s largest segment GM fell ~830bps y/y) and modest drags on Extruded and Custom Solutions (down ~30bps y/y and ~40bps y/y respectively). As conditions through the Strait of Hormuz have gradually improved over the past few months, so too have related inflationary pressures leading to significant oil/oilderivatives cost reductions. Given that end market demand has remained largely unchanged since the company’s last update and pricing actions/contracted price adjustments should have taken hold, we think the company is likely well on its way to replicating the post-4Q21 margin recovery (similar rapid cost inflation resulted in GM compression of ~360bps y/y before price actions kicked in) while continuing to make progress on its Tyman integration. As such, our EPS estimates for FY26 and FY27 remain unchanged as we reiterate our Buy rating and $28 PT."

For an analyst ratings summary and ratings history on Quanex Building Products click here. For more ratings news on Quanex Building Products click here.

Shares of Quanex Building Products closed at $19.82 yesterday.

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