On Thursday, Truist Securities expressed continued confidence in Eagle Materials (NYSE:EXP), maintaining a Buy rating and a price target of $330.00. Currently trading at $257.76, the stock has shown remarkable resilience, with InvestingPro data indicating low price volatility. The firm’s analyst, Keith Hughes, advocated purchasing Eagle Materials shares amidst recent market declines attributed to concerns over interest rates and wallboard pricing. Hughes noted that despite these fears, there has been no observed impact on the company’s performance, which is reflected in the company’s "GREAT" overall financial health score.
Hughes highlighted that 50% of Eagle Materials’ EBITDA is derived from the wallboard industry, which has indicated that manufacturer pricing is expected to maintain modest year-over-year gains. An additional price increase is anticipated in February. Wallboard volume remained stable throughout 2024 and is projected to continue at this rate into 2025, a factor that Hughes believes is not currently reflected in the stock’s price. With the company’s next earnings report due on January 29, InvestingPro subscribers can access 12 additional key insights about Eagle Materials’ financial performance and market position.
The analyst also pointed out favorable weather conditions during the fourth quarter, beneficial for the company’s cement operations, which also account for 50% of EBITDA. According to Hughes, these favorable conditions are likely to bolster the company’s results.
In conclusion, Hughes stated that the expectations for Eagle Materials are more conservative compared to the rest of the sector, which, in his view, renders the stock an attractive investment opportunity. He emphasized that the current market concerns have not yet led to any negative outcomes for the company, suggesting that the stock may be undervalued.
In other recent news, Eagle Materials has experienced a series of analyst revisions. Stephens lowered the company’s stock target to $310 while maintaining an Overweight rating. Citi downgraded the stock from Buy to Neutral, reducing the price target to $280. Loop Capital also revised its stance, downgrading the stock from Buy to Hold and setting a price target at $315. On the other hand, Truist Securities increased its price target for Eagle Materials to $330, maintaining a Buy rating for the stock.
In recent developments, Eagle Materials announced record revenue of $624 million in its Q2 fiscal 2025 earnings call. Despite operational challenges, the company reported a 5% increase in revenue in the Light Materials segment and a litigation loss of $700,000.
The company’s CapEx for fiscal 2025 is projected to be between $280 million and $310 million, with similar levels expected for fiscal 2026. These developments underscore Eagle Materials’ strategic approach to navigating dynamic market conditions. Analysts anticipate a swift recovery in housing activity and a potential increase in cement and wallboard pricing due to expected volume growth in cement, driven by infrastructure spending and favorable year-over-year weather comparisons.
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