UBS has elevated Vulcan Materials (VMC, Financial) from a Neutral to a Buy rating, boosting the price target from $280 to $318. This upgrade is driven by anticipated strong growth in both price and volume, despite the possibility of a prolonged period of industrial sector challenges. The firm expresses increased confidence in Vulcan's ability to maintain healthy margins, attributing this to effective price-cost management and strong execution. UBS believes that the company's robust business model in building materials will continue to ensure favorable price versus cost dynamics and solid margins.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 23 analysts, the average target price for Vulcan Materials Co (VMC, Financial) is $296.77 with a high estimate of $325.00 and a low estimate of $184.78. The average target implies an upside of 9.48% from the current price of $271.07. More detailed estimate data can be found on the Vulcan Materials Co (VMC) Forecast page.
Based on the consensus recommendation from 26 brokerage firms, Vulcan Materials Co's (VMC, Financial) average brokerage recommendation is currently 2.0, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Vulcan Materials Co (VMC, Financial) in one year is $246.82, suggesting a downside of 8.95% from the current price of $271.07. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Vulcan Materials Co (VMC) Summary page.
VMC Key Business Developments
Release Date: April 30, 2025
- Adjusted EBITDA: 27% improvement year-over-year.
- Adjusted EBITDA Margin: Expanded by 420 basis points.
- Aggregates Shipments: 1% lower than the prior year.
- Aggregates Freight-Adjusted Price: Improved 7% year-over-year; 8.5% on a mix-adjusted basis.
- Aggregates Freight-Adjusted Unit Cash Cost of Sales: Declined 3% compared to the prior year.
- Aggregates Cash Gross Profit: Grew to $10.99 per ton.
- Asphalt Cash Unit Profitability: Expanded by 19%.
- Concrete Cash Unit Profitability: Expanded by 77%.
- Total Cash Gross Profit: Improved by over 50%.
- Free Cash Flow: $869 million over the last 12 months, 93% conversion of net earnings.
- Return on Invested Capital: 16.2%.
- Net Debt to Adjusted EBITDA Leverage: 2.2 times.
- Cash on Hand: Over $190 million.
- Capital Expenditures: $105 million in the quarter; expected $750 million to $800 million for the full year.
- SAG Expenses: In line with expectations; full year expected between $550 million and $560 million.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Vulcan Materials Co (VMC, Financial) reported a 27% improvement in adjusted EBITDA and a 420 basis points expansion in adjusted EBITDA margin, showcasing strong financial performance.
- The company achieved a 20% year-over-year improvement in aggregates cash gross profit per ton, indicating effective execution of their growth strategy.
- Cash unit profitability in both Asphalt and Concrete expanded considerably by 19% and 77%, respectively, contributing to over 50% improvement in total cash gross profit.
- Vulcan Materials Co (VMC) generated $869 million of free cash flow over the last 12 months, reflecting a 93% conversion of net earnings.
- The company maintains a strong balance sheet with net debt to adjusted EBITDA leverage at 2.2 times, providing financial flexibility for future growth opportunities.
Negative Points
- Aggregates shipments in the first quarter were 1% lower than the prior year, impacted by extremely cold weather and one less shipping day.
- Private demand faces challenges due to affordability issues and elevated interest rates, affecting residential construction activity.
- The interest rate environment and macroeconomic uncertainty are delaying the timing of recovery in private nonresidential construction starts.
- Vulcan Materials Co (VMC) may experience some tariff-related inflationary pressures in operating costs, although not expected to have a material effect on earnings.
- The company anticipates challenges in private demand, particularly in the fixed concrete plant side, driven by private demand challenges.
