DA Davidson maintains Granite Construction buy, $108 target

Published 27/05/2025, 15:56
DA Davidson maintains Granite Construction buy, $108 target

On Tuesday, DA Davidson reiterated its Buy rating on Granite Construction shares (NYSE:GVA) with a price target of $108.00, maintaining a positive outlook on the company’s growth prospects. According to InvestingPro data, the company’s stock currently trades at $90.41, with a market capitalization of $3.95 billion. The company has demonstrated strong performance with revenue growth of 11.42% over the last twelve months. The firm’s analyst Brent Thielman provided insights following recent meetings with Granite Construction’s management, including CEO Kyle Larkin. Thielman highlighted the company’s focus on advancing mergers and acquisitions as a key strategy while noting that organic opportunities remain robust.

Granite Construction’s management team is working on a strategy that differentiates the company from its past iteration, aiming to improve execution consistency and leverage materials assets more effectively. According to Thielman, these efforts are expected to enhance the company’s appeal to investors. He also pointed out that the firm is currently valued at a discount compared to industry averages, trading four turns below the average of the infrastructure services group and three times below the materials/infrastructure products group. InvestingPro analysis supports this view, revealing a notably low PEG ratio of 0.14, suggesting attractive valuation relative to growth potential. The company maintains a strong financial position with a GREAT overall health score and has consistently paid dividends for 36 consecutive years.

The analyst’s commentary suggests that the infrastructure market opportunities, along with the strategic initiatives undertaken by Granite Construction’s management, are factors that could contribute to the company gradually gaining investor traction. Thielman’s maintained price target of $108 indicates a belief in the company’s potential for growth and value creation.

Granite Construction, known for its work in the transportation, water, and mineral exploration markets, is poised to capitalize on the current infrastructure market opportunities. The company’s emphasis on mergers and acquisitions is part of a broader strategy to expand its reach and enhance its service offerings.

Investors and market watchers will be keeping an eye on Granite Construction as it continues to implement its management strategy and take advantage of market opportunities. The company’s stock performance and ability to meet the expectations set by analysts like Thielman from DA Davidson will be of interest to those following the infrastructure sector. For deeper insights into Granite Construction’s valuation and growth prospects, investors can access comprehensive analysis and additional ProTips through InvestingPro’s detailed research reports, which provide expert analysis on over 1,400 US stocks.

In other recent news, Granite Construction reported a surprising earnings performance for Q1 2025, with earnings per share (EPS) of $0.01, surpassing the expected loss of $0.52. However, the company’s revenue fell short of expectations, reaching $614.62 million compared to the anticipated $705.95 million. Despite the revenue miss, the company maintained its 2025 revenue guidance between $4.2 billion and $4.4 billion. In addition to the earnings report, Granite Construction has been awarded a $54 million contract for the first phase of a highway realignment project in Alaska, in collaboration with the Alaska Department of Transportation and Public Facilities.

In executive news, Granite’s Chief Operating Officer, James A. Radich, will retire on July 4, 2025, with no direct successor being named. Instead, the company’s Senior Vice Presidents will report directly to CEO Kyle Larkin. Analyst firm DA Davidson has reaffirmed its Buy rating for Granite Construction, citing strategic initiatives and mergers as key focus areas for the company. The analyst firm expressed confidence in Granite’s trajectory, highlighting the company’s consistent execution and strategic direction. These developments reflect Granite Construction’s ongoing efforts to enhance its market position and operational efficiency.

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