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On Tuesday, DA Davidson maintained a Buy rating on Vulcan Materials Company (NYSE:VMC), emphasizing the company's strong position amidst varying sector trends. With a market capitalization of $30.37 billion and a "GREAT" financial health score according to InvestingPro, Vulcan Materials demonstrates robust fundamentals. The stock currently trades near its 52-week low of $215.08, though analysis suggests it may be slightly overvalued at current levels. Brent Thielman, an analyst at DA Davidson, highlighted the robust public sector trends in key markets for Vulcan Materials, which he believes could offset weaker private sector dynamics in the near term. Thielman pointed out the company's ability to manage potential inflationary pressures through pricing power and its leverage to benefit from any favorable shifts in interest rates. The company's strong market position is reflected in its impressive revenue of $7.42 billion and consistent dividend payments, which it has maintained for 55 consecutive years - one of several valuable insights available through InvestingPro's comprehensive analysis tools.
The analyst provided detailed observations of Vulcan Materials' performance across different states. In California, total trailing twelve months (TTM) comparisons showed a 17% decrease year-over-year (Y/Y), yet the value of lettings, or contracts awarded, stood 7% and 22% above their 5-year and 10-year averages, respectively. The volume of bids planned to be advertised for 2025 is expected to surpass those of the last several years, indicating a robust pipeline of future projects.
In Texas, TTM figures have seen a significant 33% increase Y/Y, with lettings values soaring to 92% and 133% above the 5-year and 10-year averages. The fiscal year-to-date bid values have already outpaced the total for fiscal 2022, and while the projected values for fiscal 2025 and 2026 are slightly below those for fiscal 2024, they remain substantially higher compared to the past decade.
Georgia's TTM comparisons also show an 11% increase Y/Y, with lettings values exceeding the 5-year and 10-year averages by 24% and 46%, respectively. The planned schedules for 2025 are expected to reach historically high levels, suggesting a continuation of elevated project releases.
Meanwhile, Tennessee's TTM figures have dipped slightly by 4% Y/Y, but lettings values are still well above average, at 31% and 48% higher than the 5-year and 10-year averages. In Virginia, despite a 17% decrease in TTM comparisons Y/Y, the lettings values are up by 29% and 37% over the 5-year and 10-year averages, indicating strong performance in the public sector.
Thielman's analysis reflects confidence in Vulcan Materials' future prospects, backed by a solid backlog of bids and the company's strategic positioning to capitalize on market trends and government infrastructure spending. Trading at a P/E ratio of 32.99, the company has attracted a consensus analyst target suggesting potential upside, with targets ranging from $184.78 to $335 per share. For deeper insights into Vulcan Materials' valuation and growth prospects, investors can access the detailed Pro Research Report available exclusively on InvestingPro, which offers comprehensive analysis of this and 1,400+ other top US stocks.
In other recent news, Vulcan Materials Company has been in the spotlight due to several notable developments. Citi analysts have adjusted their price target for Vulcan Materials, reducing it from $301.00 to $285.00, while maintaining a Buy rating. This revision accounts for weaker demand influenced by severe weather conditions affecting first-quarter earnings estimates. Despite this, full-year 2025 estimates have increased, factoring in mergers and acquisitions, and the company is expected to achieve double-digit growth in cash gross profit per ton.
JPMorgan has upgraded Vulcan Materials' stock from Neutral to Overweight, despite lowering the price target to $285.00. The upgrade reflects a positive outlook based on a 20% year-over-year growth forecast for fiscal year 2025 EBITDA, aligning with the company's guidance. Stifel analysts have also resumed coverage with a Buy rating and a price target of $287.00, highlighting the company's strategic focus on aggregates and its advantageous regional footprint.
In terms of safety, Vulcan Materials reported a mine safety incident at its Liberty Quarry in South Carolina, where an imminent danger order was issued by the Mine Safety and Health Administration. The company has since taken corrective actions to address the safety violation. These recent developments underscore Vulcan Materials' strategic initiatives, market potential, and ongoing commitment to safety.
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