QXO Inc (QXO.N): Thoughts on Recent Underperformance & Model Update

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QXO Inc (QXO.N): Thoughts on Recent Underperformance & Model Update

QXO Inc (QXO.N)

10 July 2026 Citi Research

While we remain positive on QXO ahead of the 2Q earnings report, we’ve heard the

following concerns from investors:

Fair valuation? Some investors have suggested the stock is roughly fairly valued

giving no credit for out-year synergies and cost saves; under this view, QXO at

~$14.60 is trading around ~14.5x EBITDA (assuming ’27 EBITDA of ~$2.2B, net

debt of ~$8.5B, and fully diluted share count of ~1.6B). The ~14.5x EBITDA multiple

is roughly comparable with FERG trading ~14.0x. While we understand the point on

NTM valuation, we think a DCF-based approach incorporating long-term cost and

cross-selling synergies is more appropriate, as it better captures QXO’s

consolidation opportunity and Brad Jacobs’ prior track record.

Channel conflicts? Other investors have asked about potential channel conflict

between the distribution arm of BECN and the installer arm of BLD; we

acknowledge some possibility of conflict on the roofing side. Notably QXO

published a Q&A on their investor website this week, in which they mentioned

leveraging existing customer relationships, job site presence and the possibility of

“portfolio optionality” if a non-core asset is more valuable outside of QXO. In terms

of potential divestitures, investor questions have centered around BLD’s

Progressive Roofing Installation business, which the company acquired in 2025 for

$810mm; Progressive Roofing reported $89mm EBITDA for LTM ending March

2025 (BLD offer represented 9.1x multiple) with $438mm in sales (70% R&R, 30%

new build). A potential divestiture could resolve QXO channel conflicts and

accelerate deleveraging or capital recycling, in our view.