Analyst Anthony Pettinari of Citi maintained a Buy rating on QXO Inc, with a price target of $33.00.
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Anthony Pettinari has given his Buy rating due to a combination of factors that highlight QXO Inc’s potential in the building products distribution market. The company is positioned to capitalize on the fragmented nature of this industry, with the top four distributors holding only a small portion of the market share. This presents a significant opportunity for QXO to expand through mergers and acquisitions, leveraging the leadership and proven track record of its CEO, Brad Jacobs, who has successfully led multiple high-performing public companies.
Furthermore, Pettinari’s analysis suggests that QXO’s strategic approach, which includes a tech-driven methodology and disciplined valuation practices, will facilitate its growth. The company’s financial projections, including a substantial increase in sales and earnings, support this optimistic outlook. The valuation, derived from a discounted cash flow model, indicates a target price of $33, reflecting a promising expected return. However, potential risks such as M&A execution and market competition are acknowledged, emphasizing the importance of the experienced executive team in navigating these challenges.
In another report released on July 1, Truist Financial also initiated coverage with a Buy rating on the stock with a $30.00 price target.