QXO: Resilient Execution and Expanded M&A Firepower Underpin Buy Rating Despite Near-Term Roofing Market Softness

William Blair analyst Ryan Merkel has maintained their bullish stance on QXO stock, giving a Buy rating today.

Ryan Merkel has given his Buy rating due to a combination of factors that underscore QXO’s strategic positioning and growth potential. He views the recently prereleased fourth-quarter results as broadly consistent with underlying roofing market conditions, noting that QXO’s sales decline modestly outpaced industry softness rather than signaling company-specific weakness. In his view, some prior expectations were too optimistic given limited storm activity, challenging weather, and weaker new housing, so the in-line performance is more reassuring than the headline decline suggests. Moreover, he interprets the strong investor participation in QXO’s equity issuance as a sign of confidence in management’s long-term plan to scale the business toward a much larger revenue base.

Merkel places particular emphasis on the company’s enhanced M&A capacity, pointing to the new $750 million equity raise on top of an earlier multibillion-dollar financing arrangement as a clear indicator that substantial acquisitions are on the horizon. He estimates that QXO now has ample financial flexibility—potentially several billions of dollars—to pursue one or more sizable transactions, with a focus likely on assets such as lumberyards that fit its strategic roadmap. While he expects the roofing market to remain subdued in the near term, he anticipates an improved backdrop as the comparison base eases and macro drivers like potential rate cuts and supportive policy developments begin to help demand. Taken together, Merkel believes the combination of resilient execution in a soft market, robust balance sheet capacity for acquisitions, and a compelling long-term consolidation strategy supports a favorable risk-reward profile, justifying his Buy rating on QXO.

Merkel covers the Industrials sector, focusing on stocks such as Aaon, QXO Inc, and Fastenal Company. According to TipRanks, Merkel has an average return of 6.1% and a 55.03% success rate on recommended stocks.

In another report released today, Oppenheimer also maintained a Buy rating on the stock with a $30.00 price target.