BLDR - Recent Stock Move About Rates; Still Long Term Winner in Pressured Sector

Research evidence excerpt

BLDR - Recent Stock Move About Rates; Still Long Term Winner in Pressured Sector

Truist Securities

Equity Research Report May 20, 2026

INDUSTRIALS: Distributors Builders FirstSource, Inc. (BLDR)

BLDR - Recent Stock Move About Rates; Still Long Term Winner in Keith Hughes

404-926-5032 Pressured Sector

Keith.Hughes@truist.com

Julian Nirmal Our entire coverage group has been in free fall for roughly a month on inflation/rate fears

404-836-4749 including BLDR. The combination of weak volume and pricing on non-commodity items has

Julian.Nirmal@truist.com put pressure on LBM peers as well. A continuation of the downturn may lead to more industry

consolidation which BLDR could play a role as they will consider this in addition to more

share repurchase. Regardless, we believe the rest of the year will see pressure but do think

this has been recently priced in the stock with shares trading at 9x our 2027 EBITDA. Remain

Stock Rating BUY Buy.

Unchanged

Price Target $115.00 We recently spent time with management and left with the following takeaways:

Downturn Probably Leads to Next Round of Consolidation/Exits. The downturn in BLDR

results is shared by many of their LBM peers given the housing pressure. Both volume and

pricing on non-commodity items has resulted in substantial contraction for all involved in the

TR to Target 63.9% industry. If the downturn continues much longer, we could see scenarios where (1) smaller

Price (May 18, 2026) $70.18 players exit the market and/or (2) larger players such as BLDR complete larger deals to take

52-Wk Range $149.21-$70.18 the industry to the next step of consolidation.

Market Cap ($M) $7,804 Margin Pressure Has Been on All Products... BLDR has seen its EBITDA margin contract