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Beacon (BECN) Buys First Coastal, Expands in Southeast
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Beacon Roofing Supply, Inc. (BECN - Free Report) seems to be on an acquisition spree of late. Following the announcement of the acquisition of Whitney Building Products, LLC, the company announced the buyout of First Coastal Exteriors, LLC.
Although financial terms of the deal were not disclosed, this addition will broaden the product offerings in the Alabama and Mississippi markets of Beacon.
Shares of Beacon gained 1% during the trading session on Jan 4, 2023.
Munroe Best, Beacon’s president of the South Division, said, “This acquisition is another exciting addition as we continue to expand our footprint and drive toward achieving our Ambition 2025 growth targets.”
Notably, First Coastal serves in Mobile, AL and Pearl, MS. First Coastal distributes complementary residential and commercial building products, including siding, gutter products, and windows. This buyout will strengthen the complementary line of business in Southeast.
Strategic Initiatives to Drive Growth
Beacon has undertaken several strategic initiatives to drive its long-term ambition of growing and enhancing the customer experience, expanding the top line and margin and boosting value for customers, suppliers, employees and shareholders.
In February 2022, the company unveiled Ambition 2025 targets, which emphasized 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.
Beacon has been focusing on business expansion through bolt-on acquisitions and divestitures. Recently, it announced the acquisition of Whitney Building Products, LLC. Earlier, on Nov 1, 2022, BECN acquired Coastal Construction Products, one of the largest independent distributors of specialty waterproofing and associated products in the United States. Notably, during the first nine months of 2022, the company made three acquisitions.
Image Source: Zacks Investment Research
Shares of Beacon — the largest distributor of residential and non-residential roofing materials in the United States and Canada — have outperformed the industry in the past year. The company has been benefiting from strategic initiatives and the successful execution of technology initiatives in the growing e-commerce platform.
Wingstop currently sports a Zacks Rank #1. WING has a long-term earnings growth rate of 12%. Shares of WING have lost 20.3% in the past year.
The Zacks Consensus Estimate for Wingstop’s 2023 sales and earnings per share (EPS) suggests growth of 18.4% and 16.1%, respectively, from the year-ago period’s estimated levels.
Tecnoglass currently carries a Zacks Rank #2 (Buy). Shares of the company have gained 24.9% in the past year.
The Zacks Consensus Estimate for TGLS’ 2023 sales and EPS suggests growth of 11.2% and 9%, respectively, from the year-ago period’s estimated levels.
Yum China currently carries a Zacks Rank #2. YUMC has a long-term earnings growth rate of 11%. Shares of YUMC have gained 20.4% in the past year.
The Zacks Consensus Estimate for Yum China’s 2023 sales and EPS suggests growth of 14.3% and 56.7%, respectively, from the year-ago period’s estimated levels.
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Beacon (BECN) Buys First Coastal, Expands in Southeast
Beacon Roofing Supply, Inc. (BECN - Free Report) seems to be on an acquisition spree of late. Following the announcement of the acquisition of Whitney Building Products, LLC, the company announced the buyout of First Coastal Exteriors, LLC.
Although financial terms of the deal were not disclosed, this addition will broaden the product offerings in the Alabama and Mississippi markets of Beacon.
Shares of Beacon gained 1% during the trading session on Jan 4, 2023.
Munroe Best, Beacon’s president of the South Division, said, “This acquisition is another exciting addition as we continue to expand our footprint and drive toward achieving our Ambition 2025 growth targets.”
Notably, First Coastal serves in Mobile, AL and Pearl, MS. First Coastal distributes complementary residential and commercial building products, including siding, gutter products, and windows. This buyout will strengthen the complementary line of business in Southeast.
Strategic Initiatives to Drive Growth
Beacon has undertaken several strategic initiatives to drive its long-term ambition of growing and enhancing the customer experience, expanding the top line and margin and boosting value for customers, suppliers, employees and shareholders.
In February 2022, the company unveiled Ambition 2025 targets, which emphasized 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.
Beacon has been focusing on business expansion through bolt-on acquisitions and divestitures. Recently, it announced the acquisition of Whitney Building Products, LLC. Earlier, on Nov 1, 2022, BECN acquired Coastal Construction Products, one of the largest independent distributors of specialty waterproofing and associated products in the United States. Notably, during the first nine months of 2022, the company made three acquisitions.
Image Source: Zacks Investment Research
Shares of Beacon — the largest distributor of residential and non-residential roofing materials in the United States and Canada — have outperformed the industry in the past year. The company has been benefiting from strategic initiatives and the successful execution of technology initiatives in the growing e-commerce platform.
Zacks Rank & Key Picks
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 in the Zacks Retail-Wholesale sector are Wingstop Inc. (WING - Free Report) , Tecnoglass Inc. (TGLS - Free Report) and Yum China Holdings, Inc. (YUMC - Free Report) .
Wingstop currently sports a Zacks Rank #1. WING has a long-term earnings growth rate of 12%. Shares of WING have lost 20.3% in the past year.
The Zacks Consensus Estimate for Wingstop’s 2023 sales and earnings per share (EPS) suggests growth of 18.4% and 16.1%, respectively, from the year-ago period’s estimated levels.
Tecnoglass currently carries a Zacks Rank #2 (Buy). Shares of the company have gained 24.9% in the past year.
The Zacks Consensus Estimate for TGLS’ 2023 sales and EPS suggests growth of 11.2% and 9%, respectively, from the year-ago period’s estimated levels.
Yum China currently carries a Zacks Rank #2. YUMC has a long-term earnings growth rate of 11%. Shares of YUMC have gained 20.4% in the past year.
The Zacks Consensus Estimate for Yum China’s 2023 sales and EPS suggests growth of 14.3% and 56.7%, respectively, from the year-ago period’s estimated levels.