Shares of Construction Partners Inc ROAD began trading on the Nasdaq May 4. The company recently announced it will release its fiscal second-quarter results June 4.
The Analyst
Baird Equity Research's Andrew Wittmann initiated coverage of Construction Partners at Outperform with a price target of $15.
The Thesis
Construction Partners is an infrastructure pure play with a steady business that comes from exposure to predictable maintenance-related state and local transportation spending budgets, the analyst said in the Tuesday initiation note.
Baird expects 5-7-percent organic revenue growth combined with modest margin expansion and mid-teens EPS growth. In the initiation note, Wittmann named the following reasons why the stock represents a long-term investment opportunity:
- Relatively predictable returns, as the company generates around 70 percent of its revenue from the public sector.
- Construction Partners' risks do not typically include large project cost overruns or a dependence on multiple permits for construction starts, because it primarily competes against local, family-owned companies on projects with an average size of $1.7 million.
- The company targets markets with relatively less competition and is generally better capitalized than the competition.
- Acquisitions complement Construction Partners' organic strategy, Wittmann said. It has an identifiable pipeline of relationship-sourced acquisition opportunities and a management team with nearly 40 years of local market experience.
The Price Action
Construction Partners was trading lower by 1.3 percent at the time of publication Tuesday afternoon.
Related Links:
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
date | ticker | name | Price Target | Upside/Downside | Recommendation | Firm |
---|
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.