Shares of GMS Inc. soared on Friday as the building-products distributor became the centre of a potential bidding war between two heavyweights in the construction supply industry: Home Depot and QXO.
The stock jumped 29% in pre-market trading, reaching $104.50, after The Wall Street Journal reported that Home Depot had submitted an offer to acquire the Georgia-based company.
The report followed QXO’s public $5 billion bid on Wednesday, which offered $95.20 per share in cash — a 27% premium to GMS’s 60-day average share price.
GMS, which operates over 320 distribution centers and nearly 100 tool sales and rental locations, confirmed it had received the unsolicited proposal from QXO.
In a statement Thursday, the company said its board would “carefully review and evaluate” the bid.
QXO pushes forward with firm offer
QXO, led by serial dealmaker Brad Jacobs, has made it clear it intends to pursue GMS aggressively.
The firm, which recently completed an $11 billion acquisition of Beacon Roofing Supply, said its offer for GMS required no financing condition.
In a letter to GMS CEO John Turner, Jacobs urged a response by June 24 or warned that the offer would be taken directly to shareholders.
“Our all-cash proposal to acquire GMS delivers immediate and certain value to GMS shareholders at a meaningful premium,” Jacobs said in a statement.
Jacobs is known for roll-up strategies and previously won over Beacon Roofing’s board after raising his offer.
Market watchers say a similar playbook could emerge here if GMS hesitates.
Home Depot’s interest signals broader sector ambition
Home Depot’s reported interest in acquiring GMS suggests the retail giant is looking to deepen its reach into the fragmented construction supply market.
With a market capitalization of approximately $345 billion, Home Depot has significant resources to compete against QXO, whose market value stands at about $13 billion.
A successful acquisition would expand Home Depot’s footprint with access to GMS’s established contractor customer base, which includes both residential and commercial builders.
The push toward consolidation is part of a broader trend, as companies look to gain market share and efficiency through scale and technology adoption.
Mixed earnings, but longer-term growth remains
GMS’s most recent earnings, released Wednesday, painted a mixed picture.
The company reported adjusted fourth-quarter earnings of $1.29 per share, down from $2.01 a year ago, but still above Wall Street expectations of $1.11.
Revenue fell to $1.33 billion from $1.41 billion, but also topped consensus forecasts.
CEO John Turner acknowledged macroeconomic headwinds, including high interest rates and broader market uncertainty, but struck an optimistic note.
“As we begin fiscal 2026, we are cautiously optimistic that we are nearing the bottom of this cycle and believe pent-up demand will materialize as the macro-environment improves,” Turner said.
Analysts raise price targets amid takeover buzz
The prospect of a bidding war and continued industry consolidation has sparked bullish sentiment among analysts.
Raymond James raised its price target on GMS to $90 from $80, maintaining an “outperform” rating.
The investment firm expressed a positive view on GMS shares for investors willing to wait through near-term housing headwinds, suggesting the company’s fundamentals remain strong despite current market challenges.
RBC went a step further, lifting its target to match QXO’s offer of $95.20 per share from $65 and reaffirming a “sector perform” rating.
Truist also adjusted the price target on GMS to $105 from $80 and maintained a Hold rating.
The average analyst price target now stands at $93.27, according to FactSet data, with the consensus rating skewing toward overweight.
With GMS’s response to QXO due by June 24, all eyes are on whether Home Depot will formally disclose its offer and possibly raise the stakes.
Both companies are betting on long-term trends — including housing demand, contractor loyalty, and supply chain modernization — to justify a major outlay.
The post GMS stock jumps 29% on takeover interest from Home Depot, QXO, analysts raise PTs appeared first on Invezz