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On Wednesday, JPMorgan analyst Adrian Heurta upgraded Vulcan Materials Company (NYSE:VMC) stock from Neutral to Overweight, despite lowering the price target from $290.00 to $285.00. The adjustment reflects an increased forecast for the company’s fiscal year 2025 EBITDA, which is now set at $2,477 million, marking a 20% year-over-year growth from the current EBITDA of $2.05 billion. This estimate aligns with Vulcan Materials’ own guidance range of $2.35 to $2.55 billion and includes a $150 million contribution from acquisitions. According to InvestingPro data, the company maintains a "GOOD" overall financial health score, suggesting solid operational fundamentals.
Heurta also increased the revenue estimate by 7% to a 17% year-over-year growth from the current revenue base of $7.42 billion, anticipating a slight improvement in margins. The new margin estimate is 33.9%, up 0.7 percentage points from the previous year and slightly higher than prior estimates. The revised projections take into account flat like-to-like volumes, which show a 5% year-over-year increase, hitting the upper end of the company’s guidance. Price increases are expected to be around 6.5% year-over-year, which is also at the higher end of the forecasted range. Notably, InvestingPro analysis indicates the stock is currently trading above its Fair Value, with a P/E ratio of 34.34x.
The analyst notes that the updated price target, which suggests a 22% upside, is based on a forward multiple of 15.7 times, with the stock currently trading at a multiple of 14.8 times. This represents a larger de-rating compared to Martin Marietta Materials (NYSE:MLM) over the past two months. The price target is derived from a valuation that assumes a 16.0 times forward EV/EBITDA, which is approximately half a standard deviation above the five-year average, and a discounted cash flow calculation that includes a 7.5% weighted average cost of capital and a 4.2% terminal growth rate.
While the analyst has reduced the December 2025 price target by $5, the upgrade to an Overweight rating indicates a positive outlook on Vulcan Materials’ stock performance. The company’s ability to maintain high-end guidance on volume and price increases, coupled with the expected contribution from acquisitions, appears to be driving the analyst’s optimistic view of the company’s future earnings potential.
In other recent news, Vulcan Materials Company has been the subject of multiple positive analyst reviews, all maintaining a Buy rating. The company’s strong fourth-quarter performance, which exceeded expectations due to favorable weather conditions, led Loop Capital to raise its price target to $325. Jefferies also increased its price target to $335, noting Vulcan Materials’ ability to grow its EBITDA by 12% despite flat organic volumes. DA Davidson reaffirmed their Buy rating, citing the company’s operational discipline and strategic mergers and acquisitions as key factors for expected growth in earnings per share and EBITDA. Truist Securities maintained a Buy rating with a $315 price target, highlighting Vulcan’s aggregate pricing and recent acquisitions that are projected to boost EBITDA by 7%. Stifel analysts resumed coverage with a Buy rating and a price target of $287, emphasizing the company’s strategic focus on aggregates and potential for mergers and acquisitions. These assessments reflect a broad confidence in Vulcan Materials’ financial health and growth trajectory, supported by strong pricing strategies and strategic acquisitions.
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