CanWel Building Materials Group Ltd. (TSE:CWX), a wholesale distributor of building materials and home renovation products, hit a 4-month high after saying second-quarter earnings nearly doubled on higher activity levels and pent-up demand for its products following a harsh winter.
Shares rose 5.8 percent to C$6.08 at 1:51 p.m. in Toronto, after touching C$6.15, the highest intraday price since March 25.
Net income increased to $6.9 million during the April-to-June period, compared to net earnings of $3.6 million in 2013.
Revenue increased to $226 million compared to $210 million in the same period in 2013 as a result of increased activity levels and pent-up demand for the company's products following the particularly inclement winter.
Analysts on average were looking for earnings of $0.16 per share on revenue of $226 million.
Gross margin percentage increased to 12.2 percent of revenues versus 10.6 percent last year.
"I am very pleased with our focused ability to overcome the impact of the first quarter's inclement weather during the second quarter, with strong performance across all of our key financial metrics, demonstrating our discipline, and resilience of our business model," Chief Executive Officer Amar S. Doman said in the statement.
Raymond James upgraded the stock to "outperform" from "market perform" on the stronger-than-expected results.
The stock was upgraded at Paradigm Capital from a “hold” rating to a “buy” rating in a report issued today.
A number of other analysts have also recently weighed in on CWX. Analysts at Haywood Securities raised their price target on shares of CanWel Building Materials Group from C$6.00 to C$6.50 in a research note today. They now have a “buy” rating on the stock.
Separately, analysts at Canaccord Genuity reiterated a “hold” rating on shares of CanWel Building Materials Group in a research note today. They now have a C$6.00 price target on the stock, up previously from C$5.60.
Finally, analysts at Cormark upgraded shares of CanWel Building Materials Group from a “market perform” rating to a “buy” rating in a research note on Friday, June 27th.
Two analysts have rated the stock with a hold rating and three have assigned a buy rating to the stock. The company presently has a consensus rating of “Buy” and an average price target of C$5.08.