Truist cuts Eagle Materials price target to $280, keeps Buy rating

On Thursday, Truist Securities adjusted its outlook on Eagle Materials (NYSE:EXP) shares, reducing the price target to $280 from the previous $330, while retaining a Buy rating on the stock. The reassessment by Truist Securities comes in response to disappointing wallboard shipment data observed in the first quarter of 2025. According to InvestingPro data, four analysts have recently revised their earnings expectations downward for the upcoming period, while the stock trades at a P/E ratio of 18.6.

Keith Hughes of Truist Securities expressed concern over the recent industry shipment figures for wallboard, which he anticipates could affect the company’s performance for several upcoming quarters. Despite the downward revision in expectations, Hughes believes that Eagle Materials’ cement operations might continue to see growth, albeit at a potentially slower pace. The company maintains strong fundamentals with a current ratio of 2.76 and has demonstrated modest revenue growth of 0.64% over the last twelve months.

The analyst also pointed out that the influence of tariffs, both directly and indirectly, could introduce variability in the company’s financial projections throughout the year. The statement from Truist Securities underscored the potential for tariff news to sway the stock’s short-term market performance.

Nevertheless, the long-term perspective on Eagle Materials remains positive according to Truist Securities, with the firm signaling continued confidence in the stock’s prospects. Hughes emphasized that while near-term trade may be influenced by tariff developments, the firm’s long-term stance on Eagle Materials is one of endorsement.

In other recent news, Eagle Materials reported its Q3 FY2025 earnings, which fell short of market expectations. The company posted an earnings per share (EPS) of $3.56, missing the forecasted $3.96, and revenue of $558 million, below the anticipated $578.32 million. This earnings miss was partly attributed to a 7% decline in cement volumes due to adverse weather conditions. Despite these challenges, Eagle Materials has been proactive in expanding its operations, evidenced by its acquisition of Bullskin Stone & Lime for approximately $153 million, which is expected to contribute significantly to its EBITDA.

In terms of financial strategy, Eagle Materials secured a new $300 million term loan to refinance existing debt and enhance financial flexibility. The company also established a new $750 million revolving credit facility, set to mature in 2030, which increases its capital resources for future operations and potential acquisitions. Analyst firms have maintained a cautious outlook on Eagle Materials, with DA Davidson reaffirming a Neutral rating and Citi maintaining the same rating with a price target of $279.00. Stifel also resumed coverage with a Hold rating, citing both the company’s strengths and near-term risks like increased natural gas prices and softening housing market conditions.

Eagle Materials continues to navigate these challenges by implementing price hikes for its Cement and Wallboard products, aiming for a 3% increase in Cement pricing and a 1% rise in Wallboard pricing for 2025. The company remains optimistic about infrastructure spending improvements between 2025 and 2027, which could potentially bolster its future performance.

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