TopBuild: Is There a Tipping Point?

Research evidence excerpt

TopBuild: Is There a Tipping Point?

Deutsche Bank

Research

Rating Company Date

Buy TopBuild 28 May 2026

North America Reuters Bloomberg Rating Buy

United States BLD.N BLD US Price target (USD) 505.00 Price at 27 May 26 417.52

52-week range 550.90 – 279.22

Industrials

US Building Products Valuation & Risks

Is There a Tipping Point?

Collin Verron

Since QXO announced its acquisition of TopBuild (BLD) for $505/share on Research Analyst

+1-212-250-5181 4/19/26, QXO’s stock has experienced a significant decline, falling from $25 to

$17.40 as of the 5/27 close, representing a ~30% decrease. This

underperformance significantly trails our building products coverage, which is

down about 8% on average over the same period, suggesting factors beyond Key changes

sector-wide trends. Price target (USD) 520 505 -3%

As a result of QXO's stock decline and the transaction's mixed consideration (20.2 Source: Deutsche Bank

QXO shares per BLD share plus a cash portion capped at 45% of total

consideration), the deal’s equity value has declined by ~17% from the initial

$505/share to an implied $421/share as of the close on 5/27. This has reduced

the EV/EBITDA multiple from ~14.9x LTM PF EBITDA to ~12.8x. Because BLD’s

value is now tied to QXO’s share price, BLD’s stock has also mirrored this decline,

and is now only ~2% above pre-deal announcement levels.

Given the stock decline, we took another look at the deal structure, S-4 filing, what

we believe the standalone value of BLD could be in the current market, and BLD’s

shareholder base.

Our key takes:

• QXO’s current share price implies a deal value of $421/share. We believe

BLD’s standalone valuation could be anywhere from $331 to $436/share

given current peer multiples, the 2026 EBITDA guide, the S-4 standalone