Here's Why You Should Buy Builders FirstSource (BLDR) Stock
Builders FirstSource, Inc. BLDR has been benefiting from digital initiatives and a strong value-added product portfolio. Also, its focus on cost synergies and strategic acquisitions bodes well.
Shares of BLDR have increased 20.4% in the past three months compared with the Zacks Building Products – Retail industry’s rise of 9.1%.
Earnings estimates for 2023 have moved north to $12.66 per share from $10.38 per share in the past 30 days. This depicts analysts' optimism over the company’s growth prospects.
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What’s Favoring BLDR?
Builders FirstSource remains focused on investing in innovative solutions and enhancing digital solutions for its customers. The company continues transforming the homebuilding sector digitally and has invested in expanding its digital platform. During second-quarter 2023, BLDR's BFS One Team Operating System continues to drive strong manufacturing and delivery enhancement efficiencies.
Acquisitions are essential to Builders FirstSource's growth strategy to supplement its organic growth and expand extensively across vast geographic boundaries. BLDR is advancing diverse improvements by value-added share growth while expanding through tuck-in acquisitions.
During the second quarter, BLDR enhanced its millwork capabilities by acquiring JB Millworks and Builders Millwork Supply. In July 2023, the company acquired Church’s Lumber to expand its presence and scale in the Detroit market.
In second-quarter 2023, the company's Multi-Family acquisitions contributed a 4% revenue increase and a 9% rise in EBITDA compared with the previous year's quarter. For 2023, BLDR expects acquisitions completed in the past year to add net sales growth of 3-4%. The company's recent acquisitions have enhanced its value-added offerings and broadened its customer base in attractive markets.
BLDR is focusing on cost-saving initiatives and implementing various plans for the same. As of Jun 30, 2023, BLDR reported $84 million in productivity savings, attributed to the successful utilization of the BFS One Team Operating System. The company expects to deliver more than $110-$150 million in productivity savings in 2023. This reflects the company’s efficient capacity utilization, ongoing optimization of its footprint and balancing the need for variable cost reductions with future capacity.
Zacks Rank and Other Key Picks
Builders FirstSource currently sports a Zacks Rank #1 (Strong Buy).
Some other top-ranked stocks from the Zacks Retail and Wholesale sector are:
BJ's Restaurants, Inc. BJRI sports a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 121.2% on average. Shares of BJRI have increased 15.1% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for BJRI’s 2023 sales and EPS indicates 5.6% and 423.5% growth, respectively, from the year-ago period’s levels.
Abercrombie & Fitch Co. ANF sports a Zacks Rank #1. ANF has a trailing four-quarter earnings surprise of 480.6% on average. Shares of ANF have gained 97.7% in the past year.
The Zacks Consensus Estimate for ANF’s 2024 sales and EPS indicates a rise of 3.4% and 736%, respectively, from the year-ago period’s levels.
Chuy's Holdings, Inc. CHUY carries a Zacks Rank #2 (Buy). The company has a trailing four-quarter earnings surprise of 26.6% on average. Shares of CHUY have increased 61% in the past year.
The Zacks Consensus Estimate for CHUY’s 2023 sales and EPS indicate an increase of 9.5% and 32.9%, respectively, from the year-ago period’s levels.
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BJ's Restaurants, Inc. (BJRI) : Free Stock Analysis Report
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Builders FirstSource, Inc. (BLDR) : Free Stock Analysis Report
Chuy's Holdings, Inc. (CHUY) : Free Stock Analysis Report
