Jim Cramer Says QXO Stock Could Rise to $24 If Rates Fall

Jim Cramer, host of Mad Money, expressed his belief in the potential for QXO stock to rise to $24 if interest rates decline, according to a recent interview on August 26. He praised CEO Brad Jacobs for assembling a conglomerate focusing on building products, particularly roofing, during a challenging period for the industry. Cramer speculated that the stock could rise from its current price of $14 to $24 once the Federal Reserve cuts rates, due to the potential boost in housing demand.

This view aligns with Cramer's earlier predictions in April and January, where he forecasted the stock to move from $20 to $30 and called it a buy, respectively. QXO's second-quarter results showcased substantial growth, with net sales increasing to $3.246 billion and adjusted EBITDA reaching $272 million, despite the company remaining unprofitable on a GAAP basis.

The company's long-term targets include doubling EBITDA by 2030 and achieving $50 billion in revenue within a decade. However, QXO faces challenges in integrating acquisitions like TopBuild, which was acquired in July 2021 for $17 billion, and proving that its expanded platform can generate the necessary cash flow to support its acquisition strategy.

Institutional investment in QXO has become more favorable, with 83 hedge fund portfolios holding the stock at the end of the second quarter, up from 65 in the previous quarter. A $24 target price from Cramer implies significant upside potential for QXO, but the stock's future performance will depend on the company's ability to demonstrate stronger cash generation, successful integration, and reduced financial risk alongside a recovery in housing demand.