1Q26 Recap: Margins Showing Good Resilliency

研报英文原文证据摘录

1Q26 Recap: Margins Showing Good Resilliency

) in 1Q, but IBP cautioned against a full catch-up in 2Q. MF trends showed PREV 98.8 127.3 136.7 141.3 504.1

some positive signs. Backlog growth remained solid, particularly outside of high-rise, Apr activity *Rev. (MM)

improved, and mgmt expressed confidence in 2H stabilization, though noted some projects are

being slow-walked by developers.

Heavy commercial showing strength. Commercial was once again a standout, with install sales up

~11% and heavy commercial up >20% in 1Q. Growth has been broad-based across verticals, and the

backlog in heavy commercial continues to expand, though given increasingly tough comps in the

next few quarters, the pace of growth likely slows. Light commercial remains soft, but improved into

Apr as comps ease. Heavy should continue to drive strength through 2026, supported by healthy

backlogs, improved job-level pricing, and higher average revenue per project from selling multiple

applications.

Skeptical on fiberglass increase. Fiberglass pricing has stabilized, but mgmt was skeptical the

announced June increase would see traction, given the weak housing backdrop, and with CT's

KC line coming back online soon. That said, IBP expects the ~25% spray foam increase to stick,

driven by higher costs & the skew to custom homes. Spray foam represents ~11% of sales, and

the increase will be additive to price & margins in 2H. Mix is benefiting from more multi-product

installations per job, particularly in commercial, though smaller home sizes at production builders

remain a modest headwind. Separately, IBP doesn't expect the BLD/QXO merger to change industry

competitive dynamics, its go-to-market strategy, or M&A playbook.

Philip Ng, CFA * | Equity Analyst

(212) 336-7369 | png@jefferies.com