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On Wednesday, DA Davidson reaffirmed its Buy rating on Vulcan Materials Company (NYSE:VMC) with a consistent price target of $325.00. The firm’s assessment indicates confidence in Vulcan’s ability to navigate through current challenges in the U.S. construction sector. With a current market capitalization of $35.1 billion and trading at $267.23, InvestingPro analysis suggests the stock is trading above its Fair Value, though it maintains a "GREAT" overall financial health score. Despite experiencing weaker volume, Vulcan Materials’ margins and bottom-line performance in Aggregates (Aggs.) have demonstrated resilience.
The analyst from DA Davidson highlighted that while certain headwinds are expected to persist into 2025, Vulcan Materials is still projected to achieve growth in earnings per share (EPS) and earnings before interest, taxes, depreciation, and amortization (EBITDA). This anticipated growth is attributed to the company’s operational discipline and strategic mergers and acquisitions (M&A).
Furthermore, the analyst pointed out that infrastructure markets continue to provide ongoing support to Vulcan Materials. The firm anticipates that an eventual rebound in the private sector will act as a more significant catalyst for the company’s growth. The company’s strong market position is underscored by its impressive 55-year track record of maintaining dividend payments, with a current dividend yield of 0.72%.
The statement from the DA Davidson analyst emphasized the company’s strengths, saying, "Margin/bottom-line performance in Aggs. offset weaker volume amidst U.S. construction cross-currents. Certain headwinds continue into 2025, although VMC should still manage EPS/EBITDA growth (operating discipline plus M&A). We also see ongoing support from infra. markets, with an eventual private sector rebound being more catalytic. We remain BUY."
Vulcan Materials Company, which is a major producer of construction aggregates, asphalt, and ready-mixed concrete, is thus expected to maintain its financial health and growth trajectory according to DA Davidson’s analysis. The firm’s maintained Buy rating and price target reflects their positive outlook on Vulcan’s strategic management and market position. For a comprehensive analysis of VMC’s valuation and growth prospects, investors can access the detailed Pro Research Report available exclusively on InvestingPro.
In other recent news, Vulcan Materials Company reported a strong fourth quarter for 2024, surpassing analysts’ expectations with an earnings per share of $2.17, compared to the projected $1.78. The company also exceeded revenue forecasts, reporting $1.85 billion against the expected $1.81 billion. Following these results, Vulcan Materials’ adjusted EBITDA for the quarter improved by 16% year-over-year. The company has projected its 2025 adjusted EBITDA to be between $2.35 billion and $2.55 billion, with anticipated aggregate price increases of 5-7%.
Jefferies analyst Philip Ng raised Vulcan Materials’ price target to $335, maintaining a Buy rating, citing the company’s ability to grow its EBITDA by 12% despite flat organic volumes. Loop Capital also increased its price target for the company to $325, reflecting confidence in Vulcan Materials’ fourth-quarter performance, which was aided by favorable weather conditions. The firm’s financial guidance for 2025 is noted to be above market expectations, with $150 million in EBITDA contributions anticipated from recent acquisitions.
Both Jefferies and Loop Capital analysts highlighted Vulcan Materials’ pricing strength and strategic growth initiatives as positive drivers for the company’s future outlook. The company’s recent financial achievements and strategic acquisitions, including those of Wake Stone and Superior Ready Mix, are expected to support continued growth. These developments indicate a positive trajectory for Vulcan Materials in the coming year.
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