Construction Partners stock rating upgraded by Baird to Outperform

Investing.com - Baird has upgraded Construction Partners Inc (NASDAQ:ROAD) from Neutral to Outperform while raising its price target to $122.00 from $112.00. According to InvestingPro data, the infrastructure company’s stock has already delivered an impressive 79.4% return over the past year, though it currently trades at a relatively high P/E ratio of 68.

The research firm cited stronger-than-expected performance from Construction Partners’ recent acquisitions in Texas and Tennessee, which Baird believes are larger and generate higher margins than previously estimated.

Baird noted that strong organic growth and excellent G&A leverage are also contributing to improved margins for the infrastructure construction company, leading the firm to increase its estimates "well above consensus."

The analyst report highlighted improving free cash flow, aided by 100% bonus depreciation, which Baird says enhances Construction Partners’ merger and acquisition economics.

Baird also expects Construction Partners may soon outline new long-term financial targets, as the company has achieved its previous targets approximately two years ahead of schedule, which could serve as a potential catalyst for the stock.

In other recent news, Construction Partners Inc. reported its third-quarter earnings for 2025, showing strong growth in revenue. The company posted revenue of $779.3 million, although this was below the anticipated $811.76 million. Earnings per share were reported at $0.81, which also fell short of analysts’ expectations of $0.94. Despite missing these projections, the company has seen positive investor sentiment, likely influenced by strategic acquisitions and market expansion. These developments have been a focal point for investors considering the company’s future trajectory. No recent analyst upgrades or downgrades have been reported for Construction Partners Inc., but the focus remains on their growth strategies. These recent developments highlight the company’s ongoing efforts to expand its market presence.

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