Builders FirstSource price target raised to $230 from $190 at Loop Capital

Loop Capital analyst Jeffrey Stevenson raised the firm’s price target on Builders FirstSource to $230 from $190 and keeps a Buy rating on the shares. The company will be a primary beneficiary of an ongoing rate cut environment, which is expected to result in a gradual improvement in single-family housing starts, since about 70% of its sales are into the single-family residential end market with roughly two-thirds of its product categories correlated with housing starts, the analyst tells investors in a research note. Builders’ strong Q2 gross margin results during a period of outsized multi-family sales declines also gives Loop increased confidence that its step up in gross margin from an increase in value-added product sales is sustainable at higher levels, the firm added.