Market Overview

Citi Lowers Price On Vulcan Materials (VMC)


Citi Investment Research is lowering its price target on Vulcan Materials Co (NYSE: VMC) after the company missed earnings estimates. It lowered the price to $45 from $47, but kept a Buy rating.

In a note to clients, Citi writes, "With EPS at a loss per share of $0.19 compared to consensus profit per share of $0.23 and our estimates of +$0.26. EBIT was down 41% to $39m and sales came in at $736m, up 2%. This compared to consensus of $84m and $759m respectively, while our estimates were slightly higher at $97m and $762m. A lawsuit settlement reduced EPS by $0.21, also."

Further down in the research report, Citi goes on to say, "We have reduced our profit estimates on the back of the weaker than expected Q2 results. Our EPS estimates are cut to -$0.74, -$0.06and $0.81 for 2010E, 11E and 12E. Aggregates pricing is a key swing factor for the actual outcome in profits from here, we have +2% for 2011E. On a 2011E EV/EBITDA of 15x we maintain our Buy rating but reduce our target price to $45 to reflect our lower estimates. We continue to like the business long term but short term pressure on earnings continues."

Shares of Vulcan Materials are under pressure, down 99 cents to $41.57.

Posted-In: Citi Investment ResearchAnalyst Color News Price Target Markets Analyst Ratings


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