Market Overview

Imperial Capital Finds 5 Reasons To Like Construction Partners

Imperial Capital Finds 5 Reasons To Like Construction Partners

Construction Partners Inc (NASDAQ: ROAD), a civil infrastructure company that constructs and maintains roadways across multiple southeastern states, should be bought by investors for five reasons, according to Imperial Capital.

The Analyst

Imperial Capital's Adam Hackel initiated coverage of Construction Partners with an Outperform rating and $16 price target.

The Thesis

The bullish case for Construction Partners, a relatively new company to the public markets, is based on expectations for long-term revenue and earnings growth for the following reasons, Hackel said: 

  • A competitive advantage in business structure, including vertically integrated operations, scale and expertise in hot mix asphalt production.
  • The potential for strong growth organically and through new M&A deals.
  • Favorable industrywide tailwinds, especially within public infrastructure spending, which accounts for 70 percent of total revenue. Population growth of 1 percent annually is expected through 2030 in the southeast region. 
  • Operational improvements overseen at the management level to further scale Construction Partners' vertically integrating operations and increase efficiency via standardization of business practices.
  • The stock offers investors sustainable, above-average returns on capital compared to peers.

Imperial's $16 price target is based on expectations for the stock to trade at a 10 times multiple on fiscal 2019 TEV/adjusted EBITDA, which is at the midpoint of the 5-15 times range where peers trade. A multiple of 10 times is warranted given ROAD's above-average profitability profile, Hackel said. 

Price Action

Shares of Construction Partners were trading up more than 1 percent at the time of publication Friday at $13.18. 

Related Links:

Baird Projects 'Solid Compounding Returns' From Newly Public Construction Partners

Construction Partners: Baird Sees Long-Term Investment Opportunity In Contractor's Stock

Latest Ratings for ROAD

Aug 2019MaintainsStrong Buy
Dec 2018MaintainsStrong BuyStrong Buy
Jun 2018Initiates Coverage OnOutperform

View More Analyst Ratings for ROAD
View the Latest Analyst Ratings

Posted-In: Adam Hackel Civil Engineering construction imperial capitalAnalyst Color Price Target Initiation Analyst Ratings Best of Benzinga


Related Articles (ROAD)

View Comments and Join the Discussion!

Latest Ratings

VRTXCantor FitzgeraldMaintains229.0
HCMCLSAInitiates Coverage On
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at

RedHill BioPharma Patiently Awaits Market Recognition As It Achieves Consistent Trial Success

Capital's Perspective On Cannabis: Harrison Phillips Of Viridian Capital Advisors Looks At Challenges In Cannabis Investing