CIBC Capital Markets maintained its neutral rating on the shares of Doman Building Materials Group (DBM.TO) while raising its price target to $12.00 from $11.50 after the company reported its first quarter financial results on Friday.
The bank said that while it remains cautious on the near-term industry outlook given that elevated mortgage rates continue constraining R&R activity, the company continues to navigate the tough conditions well, with disciplined pricing, procurement and cost management. CIBC believes Doman is set to capitalize on "robust medium- to long-term demand" for treated lumber in North America, supported by high home equity levels and an aging housing stock.
It also noted that the current wood-products market challenges may unlock additional M&A opportunities for Doman.
"We are maintaining our Neutral rating on Doman and raising our price target to $12 (from $11.50), reflecting a slightly higher 2027 EV/EBITDA valuation multiple (increased by 0.25x to 7.5x) on rising upside risks to our long-term margin assumptions given growing fencing mix," said analyst Hamir Patel.
The bank reduced its Q2 2026 EBITDA forecast by about 2% to $70 million reflecting some impact from fuel costs on margins, it said. It raised its 2026 EBITDA forecast by about 3% to $253 million, entirely due to stronger-than-expected Q1 results, it added.
CIBC's 2027 EBITDA forecast decreased slightly by 1% to $264 million.
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Price: $10.29, Change: $-0.10, Percent Change: -0.96%