Citi cuts Vulcan Materials price target to $285, maintains Buy

On Monday, Citi analyst adjusted the price target for Vulcan Materials Company (NYSE:VMC) shares, reducing it from $301.00 to $285.00, while reaffirming a Buy rating for the stock. With a current market capitalization of $31.75 billion and trading at a P/E ratio of 34.88x, InvestingPro analysis suggests the stock is trading above its Fair Value. The stock has demonstrated relatively low volatility with a beta of 0.8, making it an interesting consideration for stability-focused investors. The revision reflects an adaptation to the first-quarter earnings estimates due to weaker demand influenced by severe weather conditions. The 2024-25 meteorological winter, spanning December to February, was noted as the coldest three-month period in the United States since the winter of 2013-14. Particularly, Vulcan Materials’ core region in the Southeast faced unusually harsh weather, including atypical snowfall on the Gulf Coast in January. Despite these challenges, the company maintains a strong financial position with a healthy current ratio of 1.83 and has maintained dividend payments for an impressive 55 consecutive years.

The new first-quarter EBITDA estimate is set at $360 million, a decrease from the consensus of $386 million, with expected volumes down 1% year-over-year. Despite the adjustments for the first quarter, the full-year 2025 estimates have increased, now set at $2.44 billion versus the company’s guidance of $2.35 to $2.55 billion. This upward revision incorporates roughly $150 million from mergers and acquisitions, including Wake Stone and Superior Ready Mix, among others. The forecast also accounts for volumes expected to shift into the second quarter and solid price realizations in the first quarter.

Vulcan Materials is anticipated to achieve double-digit growth in cash gross profit per ton in 2025. The analyst noted that the company’s projects are progressing without significant disruptions from executive orders, the Department of Energy and Environment (DOGE), or tariffs. In light of the updated estimates and a revised target multiple of 17.5 times, down from 19.5 times, the price target has been adjusted. The new multiple reflects peer valuations and a more uncertain macroeconomic environment for private construction. Despite the lower price target, the analyst’s Buy rating suggests a continued positive outlook on Vulcan Materials’ stock performance. With analyst price targets ranging from $172.75 to $343, and the next earnings report due on May 1, 2025, investors seeking deeper insights can access comprehensive analysis and additional ProTips through InvestingPro’s detailed research report, which is part of their coverage of over 1,400 US stocks.

In other recent news, Vulcan Materials Company has been at the center of several significant developments. The company disclosed a mine safety incident at its Liberty Quarry in South Carolina, where the Mine Safety and Health Administration issued an imminent danger order. Vulcan Materials has since taken corrective measures to address the safety violations. On the financial front, JPMorgan upgraded Vulcan Materials’ stock rating from Neutral to Overweight, although it lowered the price target to $285.00, reflecting a positive outlook on the company’s projected 2025 earnings. Stifel analysts resumed coverage with a Buy rating and a $287.00 price target, citing the company’s strategic focus on aggregates and its strong regional footprint as key strengths. Truist Securities maintained a Buy rating with a $315.00 price target, noting Vulcan’s favorable aggregate pricing and recent acquisitions that could enhance EBITDA. DA Davidson also reaffirmed a Buy rating, with a target of $325.00, highlighting Vulcan’s resilience in margins and bottom-line performance despite volume challenges. These assessments underscore the analysts’ confidence in Vulcan Materials’ strategic management and growth potential in the construction sector.

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