Oppenheimer starts QXO at Outperform

Investing.com -- Oppenheimer analysts initiated coverage on QXO with an Outperform rating and a $27 price target in a note on Wednesday.

It follows the completion of the company’s "initial, cornerstone acquisition of Beacon Roofing Supply (NASDAQ: BECN)."

Oppenheimer views Beacon favorably, considering it QXO’s "original building block on its path to ultimately becoming a targeted $50B revenue leader in building products distribution."

According to Oppenheimer, Beacon Roofing Supply is an attractive asset, possessing "a broad North American network and is a leader in its distribution categories."

The analysts highlight that Beacon’s roofing business is "relatively resilient via its elevated mix of non-discretionary repair and re-roofing revenue."

Oppenheimer anticipates that QXO will achieve its objective to "organically double Beacon’s adjusted EBITDA to $2B by 2030E."

This growth is expected to be driven by "multiple, largely technology-advanced, operational enhancement initiatives."

Looking further ahead, Oppenheimer estimates that "QXO will achieve $4.5B of total adjusted EBITDA in 2030E when combining our organic growth estimates with incremental acquisitions."

The firm concluded: “We view this as a sufficient time period for QXO to demonstrate progress delivering a return upon its Beacon investment.”

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