Building products supplier Builders FirstSource, Inc. (BLDR) announced that it has entered into an agreement to sell its standalone Eastern U.S. Gypsum Distribution Operations to L&W Supply. The financial terms of the deal, which is likely to close in the third quarter of 2021, have not been disclosed so far.
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Following the news release, shares of the company gained 2% in Wednesday’s trading session. The company pared its gains slightly to close at $43 in the extended trading session.
The company’s Eastern Gypsum Operations spanned across 21 facilities in the Northeast and Southeast regions and generated sales of about $160 million in 2020.
The sale is in line with Builders Firstsource’s long-term strategy to narrow the company’s focus on its core business and growth initiatives. (See Builders Firstsource stock chart on TipRanks)
BTIG analyst Ryan Gilbert recently reiterated a Buy rating on the stock with a price target of $59. The analyst’s price target implies upside potential of 37.2% from current levels.
Consensus among analysts is a Strong Buy based on 10 unanimous Buys. The average Builders Firstsource price target of $63.70 implies upside potential of 48.1% from current levels.
Builders Firstsource scores a “Perfect 10” on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations. Shares have gained 106.2% over the past year.
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