10 Stocks on Jim Cramer and Wall Street’s Radar

6. Builders FirstSource, Inc. (NYSE:BLDR)

Average Price Target Upside: 30.10%

Number of Hedge Fund Holders: 59

In January, Cramer noted that he has been recommending Builders FirstSource, Inc. (NYSE:BLDR) for years, viewing it as a strong play on the ongoing shortage of single-family homes. While he acknowledged that the company has struggled during periods of rising interest rates, particularly in the past few months, he remains confident in its long-term potential. He added:

“And if you’re willing to believe that rates can keep falling, then I have to say that Builders FirstSource is a fantastic stock for this environment. Of course, last week’s 70% rally wasn’t entirely about interest rates. On Thursday night, the stock caught a very enthusiastic coverage initiation from Raymond James with an outperform rating.”

Cramer echoed Raymond James’ view that Builders FirstSource (NYSE:BLDR) is undervalued by Wall Street. He went on to say:

“Let me give you one more reason to like Builders FirstSource: the substantial rebuilding effort that’s ahead of us in multiple parts of this country because of hurricanes Helene and Milton in the Southeast last fall and the wildfires that hit Southern California early this month. There are tens of thousands of homes across Florida, North Carolina, and California that will need to [be] repaired or rebuilt entirely. That means more business for Builders FirstSource and its compadres…

Bottom line, once the macro backdrop is right, then Builders FirstSource and Home Depot stand to benefit… from both the persistent housing shortage and now the additional business that will come from the vast rebuilding efforts underway in multiple states impacted by natural disasters recently. So if you’re in the camp that expects lower rates, those are two terrific stocks to buy right now.”

Builders FirstSource (NYSE:BLDR) is a provider and producer of building materials and construction services throughout the United States. On February 24, Loop Capital reduced its price target BLDR from $205 to $190 while maintaining a Buy rating on the stock. The company posted a margin-driven beat, but its FY25 guidance came in below consensus expectations due to a stable outlook for single-family homes, according to the analyst’s research note.

Overall, Builders FirstSource (NYSE:BLDR) saw a high single-digit decline in sales for Q4 compared to the previous year, with drops in both single-family and multi-family markets. However, despite the continued normalization of multi-family demand and heightened competition in distribution, the company’s gross margin exceeded expectations for the quarter, Loop Capital noted.