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Stifel downgraded Beacon to ‘Hold’ from ‘Buy’ with a price target of $122.55, down from $131
Shares of Beacon Roofing Supply ($BECN) rose about 1.29% on Friday even as the company received a downgrade from analyst firm Stifel, following another rejection of a $11 billion buyout offer from technology solutions company QXO Inc., but retail sentiment remained neutral.
Stifel downgraded Beacon to ‘Hold’ from ‘Buy’ with a price target of $122.55, down from $131 after its board yet again rejected the $124.25 per share tender offer, Fly.com reported.
According to the analyst firm, its scenario analysis favors QXO successfully acquiring Beacon at $124.25 per share, and even though the rejection was anticipated, any upside of a strategic acquirer has become "significantly less likely," added the report. Additionally, the lack of a formal process against QXO's offer "significantly reduces" the chances of a takeover.
Beacon on Thursday said that QXO has failed to improve its first and only proposal “which the board determined significantly undervalues the company and our prospects for growth and value creation.”
Responding to the rejection, QXO urged the company to let shareholders decide, "Beacon's filing shows no indication of an actionable third-party alternative. We have made a very compelling offer, and Beacon should let its shareholders decide what is in their best interest."
QXO is owned by billionaire Brad Jacobs who has invested previously in logistics companies. QXO had secured committed financing for the deal, QXO has stated previously.
Beacon previously rejected the $11 billion takeover bid from QXO Inc. after which the latter was seeking to take the offer to Beacon shareholders.
Sentiment on Stocktwits remained ‘neutral’ while message volumes stayed in the ‘low’ zone.
Beacon distributes specialty building products, including roofing materials and complementary products, such as siding and waterproofing. It operates over 580 branches throughout all 50 states in the U.S. and seven provinces in Canada.
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