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On Thursday, Bernstein SocGen Group adjusted its outlook on Titan America (NYSE: TTAM), reducing the stock’s price target from $17.00 to $15.00, while maintaining a Market Perform rating. Currently trading at $13.72, near its 52-week low of $12.61, InvestingPro analysis suggests the stock is undervalued. The revision follows Titan America’s fourth-quarter earnings report, which included $390 million in revenues and earnings per share (EPS) of $0.21, contributing to the company’s trailing twelve-month revenue of $1.64 billion.
The company’s management also updated its 2025 guidance, now expecting mid-single-digit revenue growth and moderate year-over-year EBITDA margin gains. This is a shift from previous forecasts of approximately 10% revenue growth and around 180 basis points of margin improvement. With current EBITDA at $337.94 million and a Financial Health Score of "FAIR" according to InvestingPro, which offers comprehensive analysis through its Pro Research Reports covering 1,400+ US equities, Bernstein analysts believe that the company’s expectations for 2025 still require further rationalization before they can adopt a more constructive stance on the stock.
Titan America’s fourth-quarter performance was notably affected by adverse weather conditions, with heavy rainfall in Florida and colder temperatures in the Mid-Atlantic region. These factors contributed to a 2-3 percentage point headwind to cement volumes compared to expectations. Management anticipates a similar impact in the first quarter of 2025. Despite these challenges, the company maintains profitability with a gross margin of 26.09%.
Despite a 6% decrease in U.S. cement consumption in 2024, Titan America’s volumes only fell by 3%. The company’s better-than-expected performance was attributed to its involvement in various sectors, including Virginia’s data center market, key infrastructure projects, and pockets of warehouse and commercial strength, along with parts of Florida’s residential market.
Looking ahead, Titan America cites a strong backlog of infrastructure projects in its key markets, which is expected to support a surge in pent-up demand starting as early as the second quarter of 2025. This anticipated demand is seen as a positive indicator for the company’s performance in the near future.
In other recent news, Titan America reported its fourth-quarter 2024 financial results, showcasing a mixed performance with a slight miss on earnings per share (EPS) but a beat on revenue. The company reported an EPS of $0.21, just below the forecast of $0.22, while revenue exceeded expectations at $389.82 million against a forecast of $387.16 million. For the full year 2024, Titan America achieved revenue of $1.63 billion, marking a 2.7% increase from the previous year, with net income rising by 7% to $166.1 million. The company’s adjusted EBITDA also grew by 12.8% to $370.4 million, reflecting strong operational performance.
Bank of America Securities adjusted its outlook on Titan America, reducing the price target from $16.50 to $15.50 while maintaining a Neutral rating. This decision follows Titan America’s earnings results, which surpassed expectations despite weather-related challenges affecting top-line growth. The company’s performance varied across product lines, with aggregates volumes increasing by 29% year-over-year, while ready-mix and block volumes saw more modest changes. Titan America anticipates that weather conditions will impact the first quarter of 2025, but infrastructure and commercial construction sectors are expected to drive future growth. The company remains cautiously optimistic about public infrastructure funding supporting growth and margin expansion.
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