Shares of QXO, Inc. (QXO -6.61%) sank on Wednesday, falling as much as 11.1%, before recovering to a 7.7% decline as of 1:38 p.m. EDT.
QXO is the building-products distribution business helmed by CEO Brad Jacobs, who has a track record of successfully consolidating fragmented industries, such as GXO Logistics (GXO -0.88%). However, the residential housing market appears to be stuck in the doldrums, according to a new sell-side analyst note released today.
NYSE: QXO
Key Data Points
RBC lowers its price target after channel checks
Today, analysts at RBC Capital lowered their price target on QXO stock from $27 to $18. The analysts justified the move because recent channel checks showed a slow third quarter for the residential roofing business. QXO's first major acquisition was Beacon Roofing, which it acquired in April 2025, so if the third quarter was light in the roofing business, that poses risks to QXO's coming results.
The housing market has been in a downturn since the end of the COVID-19 pandemic, as both housing prices and interest rates have climbed dramatically. That is pricing many people out of the market, while those with extremely low fixed mortgage rates are essentially "stuck" in their homes, since moving to a new house at today's mortgage rates would be too expensive.
Image source: Getty Images.
QXO: buy the dip?
If the housing market recovers, QXO could be an excellent turnaround candidate. After all, even RBC's reduced price target is still more than 50% above today's share price.
The problem is that the housing market has been in a downturn for so long that this "new normal" may last for a while.
Nevertheless, Jacobs chose the industry because there is an undersupply of housing in the U.S. Therefore, at some point, one has to think things will turn around. When that happens, no one knows. However, QXO is certainly a high-quality stock to watch if and when interest rates moderate or the housing market picks up.
