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Investing.com - DA Davidson raised its price target on Construction Partners Inc (NASDAQ:ROAD) to $120.00 from $110.00 while maintaining a Neutral rating on the stock. According to InvestingPro data, the stock currently trades at an elevated P/E ratio of 87.5x and an EV/EBITDA multiple of 25.4x, suggesting rich valuation levels.
The price target increase follows Construction Partners’ preliminary fourth-quarter results and initial fiscal 2026 guidance for revenues and EBITDA, which exceeded expectations, prompting the analyst to increase estimates accordingly. The company has demonstrated strong momentum, with revenue growth of 39.2% over the last twelve months and maintains a healthy financial position with a current ratio of 1.47.
The infrastructure construction company also introduced fiscal 2030 targets that outline significant growth ambitions through both organic expansion and acquisitions, which DA Davidson detailed in its financial analysis.
Despite the higher price target, DA Davidson maintained its Neutral stance while monitoring underlying activity levels in some of ROAD’s markets, citing varying trends in the public bid environment that the firm highlighted in its September Lettings Update.
The new $120 price target represents 15 times DA Davidson’s fiscal 2026 EBITDA estimate, consistent with Construction Partners’ prior five-year average multiple.
In other recent news, Construction Partners Inc . reported its third-quarter earnings for 2025, showcasing a significant increase in revenue, although it fell short of analysts’ expectations. The company posted an earnings per share (EPS) of $0.81, missing the forecasted $0.94, while revenue reached $779.3 million, below the anticipated $811.76 million. In strategic moves, Construction Partners expanded its operations by acquiring Daytona Beach-based P&S Paving, Inc., which adds two hot-mix asphalt plants and extends its reach along Florida’s east coast. Additionally, the company acquired eight asphalt plants in the Houston area from Vulcan Materials Company affiliates, further broadening its production capacity and geographic footprint.
Analyst firm DA Davidson raised its price target for Construction Partners to $110 from $100, maintaining a Neutral rating, citing a "choppy quarter of weather." Meanwhile, Baird upgraded the stock to Outperform, increasing the price target to $122 from $112, highlighting stronger-than-expected performance from recent acquisitions in Texas and Tennessee. These developments indicate a positive outlook from analysts despite the earnings miss. Construction Partners continues to focus on strategic acquisitions to enhance its market presence and operational capacity.
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