TopBuild (BLD) is "well-positioned" to navigate near-term housing, macro headwinds given its conservative guidance and recent cost-cutting efforts, while accelerating declines in Q4 and risks of a muted 2026 recovery appear as a snag, RBC Capital Markets said in a Thursday note.

RBC said it estimates 2025 adjusted earnings before interest, taxes, depreciation and amortization of $1.03 billion, compared with Wall Street's view of $1.04 billion.

Meanwhile, 2026 adjusted EBITDA is anticipated to be $1.10 billion compared with Wall Street's expectation of $1.16 billion, with the modest growth driven by the company's recent M&A efforts, RBC said.

RBC said it forecasts margin headwinds from lower volumes through 2026, but expects TopBuild to maintain high-teens EBITDA percentage with free cash flow conversion of over 60%.

The firm initiated coverage of the company with a sector perform rating and $410 price target.

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