What Happened?
Shares of building products company Boise Cascade Company (NYSE: BCC) fell 2.6% in the morning session after the company's reduced third-quarter profit forecast prompted a price target cut from BMO Capital.
BMO Capital lowered its price target on the stock to $100 from $108, though it maintained a Market Perform rating. The adjustment followed Boise Cascade's downward revision of its third-quarter consolidated EBITDA guidance to a range of $60-$80 million, a significant drop from the prior forecast of $80-$100 million.
The company stated that the weaker outlook stems primarily from its Wood Products segment, which is experiencing lower-than-expected volumes and prices for engineered wood products (EWP).
This development comes amid a challenging backdrop for the building materials sector, with lumber futures falling due to softer demand, a decrease in U.S. building permits, and high mortgage rates constraining new home construction. Reinforcing the negative sentiment, six analysts have also recently revised their earnings expectations downward for the company.
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What Is The Market Telling Us
Boise Cascade’s shares are somewhat volatile and have had 10 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 7 days ago when the stock dropped 4.9% as concerns about the health of the U.S. economy grew following a significant downward revision of job market data.
The Labor Department reported that employers added 911,000 fewer jobs from April 2024 through March than initially estimated. These "benchmark revisions" are issued annually to more accurately account for new and defunct businesses. The report detailed that the leisure and hospitality sector added 176,000 fewer jobs, professional and business services 158,000 fewer, and retailers 126,000 fewer. This weaker-than-expected data has fueled investor anxiety, as it suggests businesses may be becoming more reluctant to hire amid economic uncertainty. The numbers issued are preliminary, with final revisions scheduled for February 2026.
JPMorgan Chase CEO Jamie Dimon added that the U.S. economy is "weakening," though he stopped short of predicting a recession. "Whether it's on the way to recession or just weakening, I don't know," he said. Dimon's remarks are closely watched, given his influence as head of one of the nation's largest banks.
Boise Cascade is down 29.7% since the beginning of the year, and at $82.47 per share, it is trading 45.9% below its 52-week high of $152.50 from November 2024. Investors who bought $1,000 worth of Boise Cascade’s shares 5 years ago would now be looking at an investment worth $1,993.
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