Investors should start building a position in Builders FirstSource , according to UBS. Analyst John Lovallo initiated coverage on the stock with a buy rating, with his price target of $232 implying more than 27% upside from Thursday’s close. Lovallo joins 11 other analysts covering the stock on Wall Street who have a strong buy or buy rating, per LSEG. Of the 16 analysts in total, the remaining four have taken a neutral stance. With a “structurally underbuilt” housing market in the U.S., Lovallo thinks the homebuilder is well positioned for growth ahead, seeing current headwinds subsiding in 2025. “In our view, the market appears overly cautious on BLDR’s growth potential over the next few years given ongoing softness in the multi-family market, decreasing building materials per housing start and skepticism regarding the path of the residential construction cycle,” Lovallo said in a Friday note. Specifically, the analyst sees Builders FirstSource growing its core organic sales at a compound annual growth rate of at least 7% through 2027. Within that same time, he also sees adjusted earnings growing roughly 16% annually and mid-to-high single-digit organic revenue growth. “We believe BLDR is uniquely positioned to grow with its homebuilder customers and drive above market organic growth through its size/scale advantage and idiosyncratic growth initiatives, including the digital platform rollout,” Lovallo also said. BLDR YTD mountain BLDR, year-to-date The stock rose around 1% in premarket trading Friday after his move. That adds to its nearly 9% of gains in 2024.