George Staphos, an analyst from Bank of America Securities, maintained the Sell rating on Boise Cascade (BCC – Research Report). The associated price target was lowered to $129.00.
George Staphos has given his Sell rating due to a combination of factors affecting Boise Cascade’s stock (ticker: BCC). The deceleration of construction trends, driven by high interest rates and worsening consumer sentiment, is anticipated to weaken the company’s fundamentals and share-price momentum. This is in comparison to other stocks covered by the analyst. Additionally, the pricing for Engineered Wood Products (EWP) is under pressure due to excess capacity, and plywood markets are experiencing erosion because of increased imports from South America and price competition from oriented strand board (OSB) products.
Further concerns include a more cautious outlook for the commodity markets and indications of a less robust market for the company’s door-store services, leading to a modest downgrading of margin outlook in Building Materials Distribution (BMD) by 50 basis points. As a result of these revised estimates, Staphos has adjusted the earnings per share forecasts downward and decreased the sum-of-the-parts (SOTP) valuation, leading to a lower price objective for Boise Cascade’s stock from $131 to $129, despite maintaining the same valuation metric for free cash flow (FCF).
Staphos covers the Consumer Cyclical sector, focusing on stocks such as Sealed Air, Sonoco Products, and Ball. According to TipRanks, Staphos has an average return of 6.4% and a 54.86% success rate on recommended stocks.
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Boise Cascade (BCC) Company Description:
Boise Cascade Co. engages in the manufacture and distribution of vertically-integrated wood products and building materials. It operates through the Wood Products and Building Materials Distribution (BMD) segments. The Wood Products segment manufactures and sells engineered wood products, plywood, particleboard, studs and ponderosa pine lumber. The Building Materials Distribution segment distributes and sells broad line of building materials, including engineered wood products, oriented strand board, plywood, lumber, and general line items such as siding, metal products, insulation, roofing, and composite decking. The company was founded on October 29, 2004 and is headquartered in Boise, ID.
