IBP Braces For Slowdown In Single-Family Market Despite Analyst Upgrade And Strong Q1 Earnings

RBC Capital Markets analyst Mike Dahl upgraded Installed Building Products Inc IBP to Sector Perform from Underperform at a raised price target of $111 (vs. $85 earlier).
The analyst is bullish on improved builder orders and strong multifamily revenues supporting higher margins and volumes in Q1 2023.
Yesterday, the company reported Q1 revenues of $659.3 million, missing the consensus of $672 million, and adjusted EPS of $2.15, exceeding the consensus of $2.08.
Dahl revised up the estimates for 2023 sales to $2.54 billion from $2.40 billion, adjusted EBITDA margin to 15.7% from 14.9% (on expected higher volumes/price/mix) and adjusted EPS to $1.88 from $1.60 earlier.
Although strength in multifamily and commercial markets is expected to drive price/mix improvements, the analyst believes a slowdown in the single-family market may pressure the volumes in Q2 and Q3 2023.
Price Action: IBP shares are trading higher by 3.74% at $116.27 on last check Friday.
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