Beacon Roofing shares to decline 5%-10% this morning, says William Blair
William Blair analyst Ryan Merkel expects shares of Beacon Roofing Supply to to decline 5%-10% this morning after the company's fiscal Q4 earnings missed the Street by 14% and 2020 EBITDA estimates are coming down by 9%-10%. The analyst says that while management is hopeful that gross margin could rise by fiscal Q2, assuming no new inflation and improving demand, he's skeptical. With a flat market outlook for 2020, pricing will remain competitive Merkel tells investors in a research note. Beacon potentially has a nice margin expansion story ahead, but it could take a few quarters until we see tangible proof of progress, says the analyst. He keeps a Market Perform rating on the shares.