Builders FirstSource Set For In-Line Third Quarter as Fourth-Quarter Risks Rise, Oppenheimer Says

03:56 PM EDT, 10/16/2026 (MT Newswires) -- Builders FirstSource (BLDR) will likely post largely in-line third-quarter results, but faces increased risks heading into the fourth quarter as a sluggish housing market weighs on demand amid pricing pressures, Oppenheimer said in a note emailed Friday. Oppenheimer models the homebuilding materials supplier's third-quarter revenue of $3.75 billion, compared with consensus estimates that it put at $3.77 billion. Adjusted earnings before interest, taxes, depreciation and amortization are pegged at $306 million, versus Wall Street's $303 million view. The brokerage lowered Builders FirstSource's 2026 EBITDA outlook to $1.05 billion from $1.10 billion to reflect a more subdued fourth-quarter view. Oppenheimer is below consensus on both fourth-quarter revenue and core profitability. Housing conditions have deteriorated more than management anticipated over the past three years, with actual EBITDA averaging roughly 17% below initial guidance in 2024 and 2025, Oppenheimer analyst Tyler Batory said. That trend has continued in 2026 with the current $1.1 billion guidance midpoint already about 27% short of the initial $1.5 billion, Batory said. "Weaker single-family starts data and homebuilder pricing commentary outweigh cost actions," Batory said. "Higher fuel/freight costs are additional risks." The brokerage cut its price target on Builders FirstSource's stock to $78 from $90, while reiterating its outperform rating. Oppenheimer lowered Builders FirstSource's 2027 EBITDA outlook to $997 million from $1.19 billion, assuming flat single-family starts. The Street expects $1.2 billion. "Our prior forecast had assumed (mid-single-digit) growth in single-family starts," Batory wrote. "We think a flat market assumption is reasonable given the recent rise in mortgage rates and subsequent pullback in housing starts." Builders FirstSource is scheduled to report its third-quarter earnings on Oct. 29. Shares of Builders FirstSource were up 1.9% ahead of market close on Friday, but have fallen 47% this year. "The market is treating near-trough conditions as the new normal," Batory wrote. While pricing remains a headwind, large builders appear well positioned to negotiate lower product costs, according to the brokerage. Lennar's (LEN) construction costs fell 6% year-over-year in its fiscal third quarter, while KB Home (KBH) also noted lower direct build costs. Earlier this week, UBS Securities said US homebuilders will likely reduce their guidance amid elevated mortgage rates and weak consumer confidence. Price: 54.63, Change: +0.95, Percent Change: +1.76