Raymond James analyst Sam Darkatsh downgraded the rating on GMS (GMS – Research Report) to a Hold today, setting a price target of $90.00.
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Sam Darkatsh has given his Hold rating due to a combination of factors surrounding the current acquisition scenario involving GMS. The situation remains uncertain after QXO’s offer to purchase GMS at $95.20 per share, with GMS’s stock trading above this offer price. This limits the likelihood of another buyer proposing a significantly higher bid, and it is improbable that QXO will increase its offer even if a competing bid emerges.
While there was speculation about a potential bidding war following a report that Home Depot might have submitted a bid, crucial details such as the offer price and timing were missing. This raises questions about the seriousness of Home Depot’s interest. Additionally, Home Depot might find it more strategic to pursue an acquisition of FBM instead, given the comparable market shares and operational similarities between GMS and FBM. Other potential buyers, like Lowe’s and Builder’s FirstSource, are also unlikely to engage in a bidding war due to strategic misalignments and financial considerations.
In another report released yesterday, Truist Financial also maintained a Hold rating on the stock with a $105.00 price target.