Frederic Tremblay, an analyst from Desjardins, has initiated a new Buy rating on Doman Building Materials Group (DBM).
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Frederic Tremblay has given his Buy rating due to a combination of factors that highlight Doman Building Materials Group’s strong market position and future growth prospects. The company has effectively managed the fluctuations in the housing market, establishing itself as a key player in the production and distribution of pressure-treated lumber, which is crucial for outdoor structures. Tremblay’s positive outlook is supported by the anticipated benefits from an upcoming housing market upturn, robust cash flow, and strategic mergers and acquisitions.
Doman’s focus on pressure-treated products, which offer higher margins compared to commodity products, positions it well in the market. The company’s expertise and scale in treated wood products, along with its distribution of composite alternatives, mitigate risks and enhance its market appeal. With a significant portion of sales in the residential sector, Doman is poised to benefit from improving housing conditions. Additionally, the company’s strong cash flow supports its attractive dividend and acquisition strategy, further solidifying its growth potential.
In another report released on October 20, RBC Capital also maintained a Buy rating on the stock with a C$11.00 price target.