Coverage of the shares of this building supply company was recently initiated at Deutsche Bank and Buckingham, with a ‘Buy’ rating, and five analysts have raised their EPS estimates for the company over the past 30 days.
TopBuild Corp. (BLD)
From Upside
TopBuild Corp.’s (BLD) operating cash flow jumped 64% and free cash flow more than doubled to $210 million in the 12 months ended September. Surging cash flow provides a source of funds to capitalize on opportunities, including bolt-on acquisitions. In July, the company acquired Viking Insulation, expanding its footprint on the west coast.
TopBuild is the largest purchaser and distributor of insulation in the U.S. Strong third-quarter results propelled the stock 8% higher on the day of the announcement. Per-share profits rose 24% to $1.53, beating the consensus by $0.14. Revenue increased 5% and exceeded expectations.
Management increased its full-year sales outlook, saying sales should climb at least 10%.
Wall Street targets per-share earnings of $5.45, up 30%. TopBuild is a Best Buy.
Richard J. Moroney, CFA, Upside, www.upsidestocks.com, 800-233-5922, December 2019