Oppenheimer establishes Outperform rating, $27 price target on QXO

Oppenheimer is establishing an Outperform rating and $27 price target on QXO (QXO), after initiating the name with a Not Rated and as the firm updates model post the closing of its initial, cornerstone acquisition of Beacon Roofing Supply. Oppenheimer views Beacon favorably as QXO’s original building block on its path to ultimately becoming a targeted $50B revenue leader in building products distribution. Beacon possesses a broad North American network and is a leader in its distribution categories, with roofing being relatively resilient via its elevated mix of non-discretionary repair and re-roofing revenue. The firm anticipates QXO delivers upon its objective to organically double Beacon’s adjusted EBITDA to $2B by 2030 via multiple, largely technology-advanced, operational enhancement initiatives. Oppenheimer estimates QXO will achieve $4.5B of total adjusted EBITDA in 2030 when combining our organic growth estimates with incremental acquisitions.