Gabelli Downgrades Builders FirstSource

In a report published Wednesday, analysts at Gabelli & Company downgrade Builders FirstSource, Inc (NASDAQ: BLDR) from Buy to Hold. The company is trading at a slight discount to the analysts' 2016 PMV.

According to the analysts the upside potential for 2017 is still too far away to predict, given the current macro and integration risks. Builders FirstSource might issue a secondary after the merger is complete, the analysts predicted.

"[M]ultifamily starts may continue to displace single-family starts outside of the Southern housing region, now of relevance to BLDR. Our earlier buy recommendation had been predicated in part on private equity's value add as "shadow" management. Their exit could create more management risk," the analysts added.

Shares traded recently at $12.89, down 5 percent.