UPDATE: D.A. Davidson Reiterates Neutral Rating, Raises PT on Texas Industries

In a report published Friday, D.A. Davidson & Co. reiterated its Neutral rating on Texas Industries TXI, and raised its price target from $45.00 to $60.00. D.A. Davidson noted, “TXI's shares have enjoyed a solid run in the last six months (+40%) as investors appear more optimistic regarding the company's prospects. In a cyclical recovery, with evident growth in TXI's markets and results clearly improving, betting against the stock is risky. To do so, one must believe growth will slow considerably in the near future in among the strongest construction markets in the country today (Texas). We aren't willing to make that bet at this juncture and our price target is now $60 (previously $45), or 15x our fiscal 2014 EBITDA estimate. Over time, we still expect valuation to compress as results recover. Despite our optimistic projections for the next 12-18 months, we don't see a sufficient argument for near-term valuation which supports both compelling upside potential as well as risk aversion for new investors in the stock; at least within the time horizon of our price target.” Texas Industries closed on Thursday at $56.81.