Home Depot-SRS deal likely a positive for Beacon, says Stifel

Stifel reiterated a Buy rating and $119 price target on Beacon (BECN) after Home Depot (HD) announced plans to acquire SRS Distribution for $18.25B. The firm sees the transaction as a positive read for Beacon, as the implied multiple on the roofing business points to upside for Beacon and because the firm believes the announcement highlights the “defensibility” of Beacon’s model. The analyst added that about 45% of the market remains beyond the control of the three largest players, indicating that investors should expect no change to Beacon’s strategy to drive above market growth.