Vulcan Materials Reports Higher Sales and Profits in Q2 2023, Analysts Bullish on Future Outlook

Stephens & Co.'s Trey Grooms raised their price target on Vulcan Materials Co (NYSE: VMC) by 13% from $230 to $260 on 2023/08/04. The analyst maintained their Strong Buy rating on the stock.

Grooms' update came after assessing Vulcan Materials' second-quarter 2023 earnings report and their participation in the earnings call. The analyst highlighted several positive results for the quarter, including higher-than-anticipated sales, greater profitability, higher volumes of aggregates and asphalt, and substantially higher gross margins. Grooms further predicted that prices and profits would continue to rise in 2024, thanks to the midyear "price actions" taken in 2023.

Vulcan Materials reported impressive financial results for the second quarter of 2023. The company's earnings per share (EPS) of $2.29 surpassed the Zacks Consensus Estimate of $1.91 by 19.9% and showed a significant increase of 49.7% compared to the second quarter of 2022. Revenue for the quarter stood at $2.11 billion, surpassing the Zacks Consensus Estimate by 2.47% and showing an 8.2% increase compared to the same period last year. Additionally, Vulcan Materials reported EBITDA of $595 million, representing a substantial 32.3% year-over-year growth.

Looking ahead, Vulcan Materials' management provided guidance for the full year of 2023. They projected net income attributable to the company in the range of $855 million to $935 million, while expecting EBITDA to be between $1.9 billion and $2 billion. However, aggregates shipments are expected to decline by 1% to 4% compared to the previous year's 236.3 million tons.

During the earnings call, Chairman & CEO Tom Hill emphasized the company's commitment to improving unit profitability and growing earnings to create value for shareholders. Hill stated, "We're well positioned to do exactly that this year and deliver approximately 20% year-over-year improvement in both our cash gross profit per ton and adjusted EBITDA."

In addition to Trey Grooms' rating update, several other analysts also revised their price targets for Vulcan Materials on August 4, 2023. James Hardiman from Citigroup raised their price target by 1.6% to $256 and maintained a Strong Buy rating on the stock. Mike Dahl from RBC Capital increased their price target by 11.3% to $212 and also maintained a Buy rating. Patrick Brown from Raymond James raised their price target by 20.3% to $202 and maintained a Buy rating as well.

Overall, 88.9% of top-rated analysts currently rate Vulcan Materials as a Strong Buy or Buy, with only 11.1% considering it a Hold. No analysts recommend or strongly recommend selling the stock.

The consensus forecast among analysts is that Vulcan Materials' upcoming year will deliver earnings per share (EPS) of $6.81. If the analysts' predictions hold true, this would represent a 24.6% increase on a year-over-year basis.

Since the release of Vulcan Materials' latest quarterly report on August 3, 2023, the stock price has experienced a minor decline of 0.1%. However, when considering the year-over-year performance, the stock has shown significant growth of 32.6%. During this period, Vulcan Materials has outperformed the S&P 500, which has only seen a 7.9% increase.

Trey Grooms, the analyst behind the recent rating update, is ranked in the top 3% of Wall Street analysts by WallStreetZen. Grooms specializes in the Basic Materials, Industrials, and Consumer Cyclical sectors and has an impressive average return of 34.3% and a win rate of 69.2%.

Vulcan Materials Company, founded in 1909 and headquartered in Birmingham, AL, is a leading producer of construction aggregates, including crushed stones, sand, and gravel. The company also offers asphalt mix, asphalt construction paving, and ready-mixed concrete. Additionally, Vulcan Materials mines, produces, and sells calcium products for the animal feed, plastics, and water treatment industries.

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