Core & Main (CNM – Research Report), the Industrials sector company, was revisited by a Wall Street analyst yesterday. Analyst Sam Reid from Wells Fargo maintained a Buy rating on the stock and has a $65.00 price target.
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Sam Reid’s rating is based on several positive indicators for Core & Main’s future performance. The company has demonstrated solid organic sales growth, driven entirely by volume, which suggests an acceleration compared to previous periods. This growth is particularly notable in product categories like PVF and Storm Drainage, despite some challenges in other areas such as Fire and Meters. Additionally, Core & Main’s gross margin showed quarter-over-quarter improvement, attributed to effective private label strategies, price discipline, and sourcing efficiencies.
Moreover, while there was a year-over-year increase in SG&A expenses, the company anticipates cost savings and synergies that could enhance financial performance by year-end. The unchanged guidance for sales and adjusted EBITDA, along with a constructive outlook for the first half of the year, further supports the positive sentiment. Despite some uncertainties in the second half, such as tariffs and rates affecting consumer sentiment, the potential for margin improvements and SG&A leverage suggests room for share price upside, justifying the Buy rating.
According to TipRanks, Reid is a 3-star analyst with an average return of 3.5% and a 53.33% success rate. Reid covers the Consumer Cyclical sector, focusing on stocks such as Lennar, PulteGroup, and DR Horton.
In another report released yesterday, Barclays also maintained a Buy rating on the stock with a $69.00 price target.