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Beacon (BECN) Opens OTC Hub & Greenfield Branch, Expands Reach

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Beacon Roofing Supply, Inc. (BECN - Free Report) has opened an OTC hub in Pico Rivera, CA and a greenfield branch in Little Chute, WI, in line with its Ambition 2025 investments strategy. The recent move will expand services to customers in the high-volume Los Angeles market and the growing Green Bay-Appleton, WI corridor.

Shares of Beacon — the largest distributor of residential and non-residential roofing materials in the United States and Canada — gained 4.21% on Mar 09.

Strategic Efforts: a Boon

Beacon has undertaken several strategic initiatives to drive its long-term ambition of growing and enhancing customer experience, expanding the top line and margin as well as boosting value for customers, suppliers, employees, and shareholders.

In February 2022, the company unveiled the Ambition 2025 targets, which emphasize its winning culture, operational excellence, above-market growth trajectory and accelerated stockholder value creation. It projects net sales of $9 billion at a CAGR of 8%, adjusted EBITDA of $1 billion at a CAGR of 10%, significant cash flow generation, net leverage of 2.5 times targeted 2025 adjusted EBITDA (resulting in $2.8 billion of investment capacity), and strategic deployment of capital on mergers & acquisitions, growth investments and share repurchases to produce superior returns.

In addition, the company’s board changed its fiscal year-end from Sep 30 to Dec 31 (effective Jan 1, 2022) for the year ending Dec 31, 2022. It feels that the change will be extremely beneficial since it will promote internal efficiencies and better external comparability.

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Shares of Beacon have gained 1.8% so far this year against the industry’s 19.8% fall. Earnings estimates for 2022 stand at $5.33 per share, indicating 10.4% year-over-year growth.

A solid residential backdrop, exceptional operating cost management and cash flow, focus on the e-commerce platform, new OTC (On-Time and Complete) Delivery Network, and a newly-designed website will drive growth.

Zacks Rank

Beacon currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some Better-Ranked Stocks From the Broader Retail-Wholesale Sector

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The Zacks Consensus Estimate for Builders FirstSource’s earnings for 2022 has moved up 4.1% in the past seven days, reflecting analysts’ optimism.

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The Zacks Consensus Estimate for GMS’ earnings for fiscal 2022 has moved up 1.5% in the past seven days, reflecting analysts’ optimism.

Fastenal Company (FAST - Free Report) presently has a Zacks Rank #2. The company has a trailing four-quarter earnings surprise of 2%, on average. Shares of FAST have gained 34.4% over the past year.

The Zacks Consensus Estimate for FAST’s earnings for 2022 has moved up 3.5% in the past 60 days, reflecting analysts’ optimism.

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