BlueLinx price target raised to $130 from $90 at Craig-Hallum

Craig-Hallum analyst Greg Palm raised the firm’s price target on BlueLinx to $130 from $90 and keeps a Buy rating on the shares. The firm notes BlueLinx reported mixed Q4 results highlighted by impressive margin performance in both segments, driving a solid earnings beat and significant free cash flow once again, which offset softer revenue. While higher rates and price deflation have presented challenges for building product distributors, the company’s much improved inventory management and cost discipline has raised the margin floor, which Craig-Hallum believes is sustainable. Looking ahead, the firm is excited about multiple capital allocation priorities in 2024, including heightened investment in a digital and technological transformation as well as continued share repurchases following last quarter’s announcement of an additional $100M buyback.