Beacon Roofing Supply (BECN) is expected to benefit from robust re-roofing activity and a defensive portfolio, RBC Capital said in a Wednesday note, adding that the acquisition by QXO will likely be completed with minimal disruption.
RBC analysts said additional disclosures revealed that "little interest" from potential alternative suitors and a dynamic macro backdrop drove the company to accept QXO's offer at $124.35 per share, lower than the earlier proposed $130 per share. The deal is expected to be completed in April.
Factors like improved balance sheet, more room for relative performance and management prioritizing improving the "bottom quintile of branches" could improve margins and improve returns, according to RBC.
RBC Capital Markets downgraded the stock rating to sector perform from outperform, while increasing its target price to $124.35 from $124.
Price: 123.81, Change: +0.03, Percent Change: +0.02
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