Raymond James lifts ROAD stock target to $111, maintains strong buy

On Monday, Raymond (NSE:RYMD) James analyst Joshua Wilson updated the financial outlook for Construction Partners Inc (NASDAQ:ROAD), raising the company’s price target from $100.00 to $111.00. The firm continues to endorse a Strong Buy rating for the infrastructure construction company, which has seen its stock surge 72.71% over the past year. According to InvestingPro data, analysts’ targets now range from $100 to $120, reflecting strong market confidence in this $5.36 billion market cap company.

Wilson’s optimism is rooted in a combination of factors that he believes will contribute to the company’s growth. He pointed out the potential for increased earnings due to organic growth opportunities stemming from the Infrastructure Investment and Jobs Act (IIJA) and healthy state Department of Transportation (DoT) budgets. Additionally, he cited the fragmented hot-mix asphalt market as an area ripe for external growth. This optimism appears well-founded, as InvestingPro data shows impressive revenue growth of 31.49% in the last twelve months. Unlock 15+ additional ProTips and comprehensive analysis with an InvestingPro subscription.

Construction Partners Inc’s strategic expansion into new geographic markets is also seen as a positive move. The company’s recent platform entries into Texas, Oklahoma, and Tennessee are expected to open up new opportunities for both organic and inorganic growth, complementing ROAD’s existing operations.

While acknowledging that the residential market may experience fluctuations, Wilson emphasized that Construction Partners Inc is more heavily reliant on recurring paving services, which are largely driven by public construction projects. This focus is expected to provide a more stable revenue stream for the company.

The Strong Buy rating was reiterated by Raymond James, signaling confidence in Construction Partners Inc’s potential for continued financial performance and stock appreciation. The new price target of $111.00 reflects this positive outlook for the company’s future.

In other recent news, Construction Partners Inc. reported impressive financial results for the second quarter of 2025, surpassing market expectations. The company achieved an earnings per share (EPS) of $0.08, outperforming the anticipated loss of $0.05, while revenue reached $571.7 million, exceeding the forecasted $559.61 million and marking a 54% year-over-year increase. Adjusted EBITDA was reported at $69.3 million, a 135% increase from the previous year, with a notable adjusted EBITDA margin of 12.1%. The company also announced an increased fiscal year 2025 revenue guidance, now projected between $2.77 billion and $2.83 billion, with organic revenue growth expected to be 8-10%.

Additionally, Construction Partners has been expanding its footprint through strategic acquisitions and new market entries. The company recently acquired PRI in Tennessee, enhancing its presence in the state and marking its expansion into new regions like Texas and Oklahoma. Bank of America Securities analyst Michael Feniger raised the price target for Construction Partners to $107.00 from $100.00, maintaining a Buy rating, citing the company’s strong performance and strategic acquisitions. The analyst highlighted the company’s favorable price versus cost dynamics and sustained infrastructure activity in its operational regions.

Construction Partners also reported a record backlog of $2.84 billion, reflecting continued demand for its services. The company remains focused on both organic and acquisitive growth, with a strong M&A pipeline and strategic expansion plans. Despite some macroeconomic challenges, the company has increased its full-year guidance, driven by successful mergers and acquisitions and organic growth.

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