U.S. markets open in 9 hours 2 minutes
  • S&P Futures

    3,831.00
    +5.50 (+0.14%)
     
  • Dow Futures

    30,978.00
    +45.00 (+0.15%)
     
  • Nasdaq Futures

    11,692.75
    +18.50 (+0.16%)
     
  • Russell 2000 Futures

    1,740.80
    +2.50 (+0.14%)
     
  • Crude Oil

    111.20
    -0.56 (-0.50%)
     
  • Gold

    1,821.60
    +0.40 (+0.02%)
     
  • Silver

    20.76
    -0.04 (-0.20%)
     
  • EUR/USD

    1.0532
    +0.0007 (+0.06%)
     
  • 10-Yr Bond

    3.2060
    -3.1940 (-100.00%)
     
  • Vix

    28.36
    -26.95 (-100.00%)
     
  • GBP/USD

    1.2203
    +0.0018 (+0.15%)
     
  • USD/JPY

    136.2590
    +0.1310 (+0.10%)
     
  • BTC-USD

    20,258.59
    -487.04 (-2.35%)
     
  • CMC Crypto 200

    439.20
    -10.86 (-2.41%)
     
  • FTSE 100

    7,323.41
    +65.09 (+0.90%)
     
  • Nikkei 225

    26,732.74
    -316.73 (-1.17%)
     

Forecast: Analysts Think BlueLinx Holdings Inc.'s (NYSE:BXC) Business Prospects Have Improved Drastically

  • Oops!
    Something went wrong.
    Please try again later.
·3 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.

Shareholders in BlueLinx Holdings Inc. (NYSE:BXC) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The consensus statutory numbers for both revenue and earnings per share (EPS) increased, with their view clearly much more bullish on the company's business prospects.

Following this upgrade, BlueLinx Holdings' four analysts are forecasting 2022 revenues to be US$4.5b, approximately in line with the last 12 months. Statutory earnings per share are supposed to fall 18% to US$31.17 in the same period. Prior to this update, the analysts had been forecasting revenues of US$4.1b and earnings per share (EPS) of US$20.11 in 2022. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.

See our latest analysis for BlueLinx Holdings

earnings-and-revenue-growth
earnings-and-revenue-growth

With these upgrades, we're not surprised to see that the analysts have lifted their price target 15% to US$131 per share. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic BlueLinx Holdings analyst has a price target of US$138 per share, while the most pessimistic values it at US$125. Still, with such a tight range of estimates, it suggests the analysts have a pretty good idea of what they think the company is worth.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 0.5% by the end of 2022. This indicates a significant reduction from annual growth of 18% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 6.1% per year. It's pretty clear that BlueLinx Holdings' revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for this year. Fortunately, they also upgraded their revenue estimates, and are forecasting revenues to grow slower than the wider market. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, BlueLinx Holdings could be worth investigating further.

Analysts are clearly in love with BlueLinx Holdings at the moment, but before diving in - you should be aware that we've identified some warning flags with the business, such as dilutive stock issuance over the past year. For more information, you can click through to our platform to learn more about this and the 4 other flags we've identified .

We also provide an overview of the BlueLinx Holdings Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.