Analysts Are Bullish on Top Conglomerates Stocks: Energy Recovery (ERII), Builders Firstsource (BLDR)

By Ryan Adsit

There’s a lot to be optimistic about in the Conglomerates sector as 2 analysts just weighed in on Energy Recovery (NASDAQ:ERII) and Builders Firstsource (NASDAQ:BLDR) with bullish sentiments.

Energy Recovery (ERII)

B.Riley FBR analyst Tom Curran maintained a Buy rating on Energy Recovery yesterday and set a price target of $20. The company’s shares opened today at $9.18.

Curran commented:

“Energy Recovery (ERII) reported revenue, $0.08, exceeding consensus of $19.1M, $3.3M, and $0.04, and our $19.0M, $3.5M, and $0.05. The Water division generated the highest gross margin, at 73.7%, and second highest quarterly revenue of this global upcycle to date. Management reiterated that it sees this record-setting global upcycle in desalination infrastructure spending persisting into 2019 and continues to pursue VorTeq commercialization on two fronts, both with SLB and independently. We maintain our Buy rating and $20 price target. Conference call is at 5PM ET.”

According to TipRanks.com, Curran has 0 stars on 0-5 star ranking scale with an average return of -7.5% and a 39.8% success rate. Curran covers the Basic Materials sector, focusing on stocks such as Independence Contract Drilling, Select Energy Services Inc, and Baker Hughes a GE company.

Energy Recovery has an analyst consensus of Moderate Buy, with a price target consensus of $20.

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Builders Firstsource (BLDR)

B.Riley FBR analyst Alex Rygiel reiterated a Buy rating on Builders Firstsource today and set a price target of $22. The company’s shares opened today at $14.58.

Rygiel observed:

“Last night after the close, Builders FirstSource (BLDR) announced 3Q18 results that were ahead of our and consensus expectations. Strong pricing growth dominated in the quarter, with modest volume growth contributing to 12.7% sales growth Y/Y . We continue to believe that BLDR can deliver industry leading growth and profitability, while expanding geographically and deleveraging the balance sheet. As the balance sheet approaches 3x leverage (mid-2019), we would expect an acceleration in acquisition activity or share repurchases. We reiterate our Buy rating and $22 price target.”

According to TipRanks.com, Rygiel is a 4-star analyst with an average return of 7.6% and a 55.6% success rate. Rygiel covers the Basic Materials sector, focusing on stocks such as Granite Construction Inc, Tutor Perini Corp, and Quanta Services.

Currently, the analyst consensus on Builders Firstsource is a Strong Buy with an average price target of $21.20.

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