Beacon Roofing Supply, Inc. (BECN): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report

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Summary:
Beacon Roofing reported fourth-quarter adjusted earnings $0.48 per share, which declined 14% year over year owing to lower gross margins and a continued unfavorable shift in sales mix to lower margin direct shipment and commercial business. For 2014 also, adjusted earnings slumped 25.5% year over year to $1.08 per share due to softer overall demand following the adverse and extended weather conditions during the first half of 2014 along with incremental operating expenses. Nevertheless, solid progress on elements of strategic plan will remain tailwinds for the company it continues to experience pressure on gross margins due to a soft residential market coupled with heightened competition. We are maintaining our Underperform recommendation on Beacon Roofing with a target price of $25.00.

Overview:

Founded in 1928, Beacon Roofing Supply, Inc. (BECN) is one of the three largest roofing material distributors in the United States and Canada, with more than 90% of its sales coming from the U.S. Apart from selling roofing materials, namely asphalt shingles and single-ply roofing, to both residential and non-residential markets, Beacon deals in complementary building materials such as vinyl siding, doors, windows, insulation and waterproofing systems. The company operates 249 branches across 39 states in the U.S. and 6 provinces in Canada. Local contractors dealing with roof replacement make up the bulk of its sales.


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



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