Builders FirstSource (BLDR) PT Lowered to $145 at Stephens

Stephens analyst Trey Grooms lowered the price target on Builders FirstSource (NYSE: BLDR) to $145.00 (from $160.00) while maintaining a Overweight rating.

The analyst commented: "We expect soft demand conditions and margin pressure to continue in 1Q and through CY25, and our base case for housing starts this year is down mid-single-digits. The year is off to a well documented slow start, given challenging weather and weak demand, and industry commentary suggests competitive pricing dynamics and margin pressure have increased seq. in 1Q. Homebuilders continue to face significant margin headwinds as well due to higher incentives/ lower base prices. Positively, 1Q lumber prices increased ~13% yoy, and BLDR's typical rule-of-thumb is +/- 5% on commodity lumber translates to roughly $60-$70 million in EBITDA. Weaker than expected housing activity and a more competitive pricing environment is likely to continue through 2025. However, we believe margins should stay above historical levels until demand finds its footing, and we believe the risk-reward is favorable at current levels. We reiterate OW. Our target goes to $145 (from $160)."

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