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On Tuesday, Loop Capital Markets adjusted its price target for Eagle Materials (NYSE:EXP) shares, reducing it to $237 from the previous $245, while maintaining a Hold rating on the stock. According to InvestingPro data, the company maintains a "GREAT" financial health score of 3.19, despite four analysts recently revising their earnings estimates downward. This change comes after Eagle Materials reported its fourth-quarter adjusted EBITDA at $141 million, which fell short of both Loop Capital’s projection of $151 million and the consensus estimate of $156 million.
The company’s sales saw a minimal decline of 1%, which was slightly better than the anticipated 2% decrease, with total revenue reaching $2.26 billion over the last twelve months. Eagle Materials’ fourth quarter was notably affected by adverse weather conditions that impacted its cement, concrete, and aggregates operations in January and February. Additionally, the quarter included a forward shift of $10 million in annual maintenance expenses and $4 million in commissioning costs for its new slag cement facility located in Houston. The company’s trailing twelve-month EBITDA stands at $754.74 million, reflecting its operational resilience despite challenges.
The profitability of the aggregates segment was also influenced by seasonal factors at its newly acquired assets in Kentucky and Pennsylvania. When excluding the specific costs related to cement and the winter impact on aggregates, the results were considered satisfactory, albeit not flawless. The sequential dip in wallboard prices emerged as a new negative factor, deviating from Loop Capital’s model, along with increased seasonality at the newly acquired aggregates facilities.
The decrease in wallboard prices led to a pullback in Eagle Materials’ stock on Tuesday, as the stock tends to move in correlation with wallboard pricing trends. Loop Capital expressed concerns about the potential for wallboard prices to continue falling, suggesting that Eagle Materials might be pursuing greater market share. This is indicated by the company’s volumes, which are significantly higher than those adjusted for regional industry standards, as well as by higher freight costs that imply a broader shipping radius and a decrease in the average selling price reported.
Looking forward, while there are positive signs in the cement segment due to seasonal demand and expected lower maintenance costs in the first quarter of 2026, Loop Capital remains cautious. The firm anticipates that the softness in the wallboard segment could persist, particularly as the expansion of Eagle Materials’ Duke, Oklahoma wallboard plant is set to coincide with a forecasted stronger housing market in the second half of 2027, potentially adding uncertainty during a period of weakness in the wallboard industry. Trading at a P/E ratio of 17.57, InvestingPro analysis suggests the stock is currently overvalued relative to its Fair Value. Investors seeking deeper insights can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers, which includes detailed analysis of Eagle Materials’ valuation metrics, growth prospects, and industry positioning.
In other recent news, Eagle Materials has reported its first-quarter earnings for 2025, revealing a shortfall in both earnings per share (EPS) and revenue compared to analyst forecasts. The company’s EPS came in at $2.08, below the expected $2.58, while revenue reached $470.2 million, missing the forecasted $487.58 million. Despite these setbacks, Eagle Materials achieved a record fiscal year revenue of $2.3 billion. Analysts have responded to these developments with adjustments to their price targets for the company. Stifel has reduced its price target from $242 to $241 while maintaining a Hold rating, citing the company’s fiscal fourth-quarter results and revenue shortfalls in its cement and wallboard segments. Similarly, Jefferies has lowered its price target from $235 to $220, also maintaining a Hold rating, and anticipates stable earnings in fiscal year 2026 due to expected improvements in the cement sector. Eagle Materials continues to focus on strategic investments, including facility upgrades and expansions, with capital expenditures projected between $475 million to $525 million for fiscal 2026. The company is optimistic about potential volume rebounds and margin improvements despite current market challenges.
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