Analysts Cut GMS Price Target Post Q4 Results

  • Raymond James analyst Sam J. Darkatsh lowered the price target for GMS Inc GMS to $70 (61% upside) from $72 while maintaining the Outperform rating on the shares.
  • The analyst mentions that GMS trades at a double-digit FCF yield; has seen recent insider buying with expanded repo authority; has a "drama-free" balance sheet, and has an extensive runway of demand buoying volumes near term.
  • Darkatsh adds that a lack of upcoming catalysts tempers the bullish stance to flip increasingly negative sentiment.
  • The analyst notes that the Q4 beat was across-the-board, with gross margin aided by better-than-feared steel-related pricing. Fundamentally, not much has changed in the business sequentially from Q3. Demand remains firm, and pricing remains sticky, he added.
  • Truist analyst Keith Hughes lowered GMS price target to $50 (15% upside) from $65 while maintaining the Buy rating on the shares post Q4 results.
  • The analyst notes that the company saw double-digit organic increases in each major product category. Hughes states that GMS' end markets remain supportive.
  • Price Action: GMS shares are trading higher by 6.17% at $43.53 on the last check Friday.
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