Citi sets Titan America stock with Buy rating, $19 target

Tuesday, Titan America (NYSE:TTAM), a $3.69 billion market cap construction materials company, received a positive outlook from Citi as the firm initiated coverage on the company’s stock, assigning it a Buy rating and setting a price target of $19.00. The new price target suggests a potential upside of 23.2% from the stock’s recent trading price, aligning with InvestingPro analysis that indicates the stock is currently undervalued.

Titan America, a prominent producer of cement, ready-mix concrete (RMC), aggregates, and other construction materials, primarily operates in the Southeastern United States. The company, which generated $337.94 million in EBITDA over the last twelve months, is particularly well-positioned to capitalize on favorable demand trends in its key markets of Florida and the Mid-Atlantic region. Citi’s coverage launch highlights Titan America’s advantageous market position and its potential for growth. InvestingPro data reveals additional insights about the company’s performance, with subscribers gaining access to over 30 key metrics and analysis tools.

The company made its public debut on February 7, 2025, with its stock closing the first full day of trading at $16.70. Since then, shares have declined slightly, trading at $15.55, near its 52-week low. Despite this, Citi sees a strong growth narrative for Titan America, forecasting an estimated 13% compound annual growth rate (CAGR) in EBITDA from 2024 to 2027. The company maintains a FAIR Financial Health Score according to InvestingPro analysis.

According to Citi’s analysis, Titan America’s growth prospects should enable the company to close the valuation gap with its peers. The firm’s $19.00 price target is based on a 9.0x multiple of the company’s projected 2025 EBITDA, compared to a 10.6x multiple for its industry counterparts.

While acknowledging the risks associated with the broader construction cycle and potential concerns due to Titan America’s smaller market capitalization and float, Citi believes the company’s growth potential and strategic market position outweigh these factors. The firm’s initiation of coverage with a Buy rating reflects confidence in Titan America’s future performance and its ability to deliver value to shareholders.

In other recent news, Titan America successfully completed its initial public offering (IPO) on the New York Stock Exchange, raising approximately $136.8 million from the issuance of 9 million new shares priced at $16.00 each. The funds are intended for capital expenditures and general corporate purposes, including investing in new technologies and potential strategic acquisitions. Titan Cement International SA, the parent company, sold an additional 15 million shares, generating $228 million in net proceeds and retaining an 87% ownership stake in Titan America.

Analyst activity around Titan America has been noteworthy, with Stifel initiating coverage with a Buy rating and a $19.00 price target, citing the company’s strategic position to enhance cement production and its proactive management team. Bernstein, on the other hand, assigned a Market Perform rating with a $17.00 price target, acknowledging the company’s strengths but expressing caution due to economic cycle risks. Goldman Sachs also began coverage, assigning a Neutral rating and a $19.00 price target, noting the company’s impressive growth rate but also highlighting challenges such as the Florida housing market oversupply and fluctuating ocean freight rates.

These developments reflect a mixed analyst sentiment, with a focus on both Titan America’s growth potential and the challenges it may face.

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