Ahead Of The Bell: Building Materials
HARTFORD, Conn. (AP) ¿ An analyst upgraded American Woodmark Corp. Tuesday and said other building materials makers show promise.
Robert W. Baird analyst Peter Lisinc said investors are discounting expectations of a slow recovery in the new home construction market.
"New construction fundamentals appear to be bottoming, but we believe recovery will be slow and ongoing pressures on consumer are likely to constrain (an) improved remodeling outlook in the near term," he wrote in a note to clients.
Valuations may look attractive compared with earnings estimates in some cases, he said. But "more attractive entry points could emerge as slower recovery expectations are discounted," Lisnic said.He raised his rating on Winchester, Va.-based kitchen cabinet maker American Woodmark to "Neutral" from "Underperform." American Woodmark has a good share price, a strong cash flow and its cash position is balanced by higher-than-average exposure to remodeling markets, Lisnic said. He added Buffalo, N.Y.-based steel processor and building-materials supplier Gibraltar Industries Inc., building components manufacturer Quanex Building Products Corp. and hardware products maker Fortune Brands Inc. are "best ideas" for investors.
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