In a report released today, Susan Maklari from Goldman Sachs upgraded Installed Building Products (IBP – Research Report) to a Buy, with a price target of $178.00.
Susan Maklari’s Buy rating on Installed Building Products (IBP) stems from a convergence of promising indicators. She anticipates an 8% YoY growth in single-family home starts in 2024, which she believes IBP is perfectly positioned to capitalize on due to their attractive value proposition to builders. Key factors underpinning her optimistic forecast include normalization in build times which will lead to increased efficiencies, improving price/cost dynamics following two years of heightened inflation, a positive contribution from multi-family volumes, and commercial margins that have transitioned from a headwind to a tailwind after a weak 2022.
Furthermore, Maklari suggests that the upside to IBP’s gross margins are not fully appreciated. She explains that sequential changes in IBP’s gross margins have historically been inversely related to variations in insulation pricing, a correlation she expects to revert to historical norms in the coming quarters. Her projections for insulation pricing suggest that the company’s gross margins could climb to 35.5% next year, significantly ahead of her own and the consensus estimates. This is further bolstered by improving demand for new homes and strong homebuilder profitability. Maklari also notes that because insulation is a small but critical component of overall home construction costs, builders are more willing to pay for a specialist installer’s expertise, implying that IBP can maintain a positive price/cost dynamic.
According to TipRanks, Maklari is a 3-star analyst with an average return of 1.0% and a 51.11% success rate. Maklari covers the Consumer Cyclical sector, focusing on stocks such as Installed Building Products, DR Horton, and KB Home.
In another report released on November 9, Evercore ISI also upgraded the stock to a Buy with a $165.00 price target.
See today’s best-performing stocks on TipRanks >>
TipRanks tracks over 100,000 company insiders, identifying the select few who excel in timing their transactions. By upgrading to TipRanks Premium, you will gain access to this exclusive data and discover crucial insights to guide your investment decisions. Begin your TipRanks Premium journey today.
Installed Building Products (IBP) Company Description:
Installed Building Products, Inc. engages in the business of installing insulation for the residential new construction market. Its products include garage doors, rain gutters, shower doors, closet shelving, and mirrors. The company was founded in 1977 and is headquartered in Columbus, OH.
Read More on IBP:
- Installed Building Products upgraded to Outperform from In Line at Evercore ISI
- Installed Building Products reports Q3 EPS $2.79, consensus $2.38
- IBP Earnings Report this Week: Is It a Buy, Ahead of Earnings?
- Installed Building Products raised to Buy at Benchmark amid ‘overblown’ concerns
- Installed Building Products upgraded to Buy from Hold at Benchmark
