Based in Birmingham, Alabama, Vulcan Materials Company (VMC) stands as the leading U.S. producer of construction aggregates, boasting a market cap of $37.6 billion. With expertise in producing crushed stone, sand, and gravel, the company is integral to infrastructure development and construction efforts across the nation.
Shares of the building material company have outperformed the broader market considerably over the past year. VMC has gained 36.2% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 32.1%. Also, in 2024, the stock is up 27%, compared to SPX’s 26.2% rise on a YTD basis.
Narrowing the focus, VMC has outpaced the Materials Select Sector SPDR Fund’s (XLB) 16.3% returns over the past year and 10.3% gains on a YTD basis.
Vulcan Materials has outpaced the broader market over the past year due to the consistent execution of its growth strategy, which includes expanding aggregates cash gross profit per ton and achieving eight consecutive quarters of double-digit growth. Strategic acquisitions, such as Wake Stone Corporation, and strong demand in high-growth markets also contributed to its success.
On Oct. 30, VMC posted its Q3 earnings which led its shares to jump 6.4%. However, its adjusted EPS and revenue of $2.22 and $2 billion fell short of Wall Street’s estimates.
For the current fiscal year, ending in December, analysts expect VMC’s EPS to grow 2.3% year over year to $7.16 on a diluted basis. The company's earnings surprise history is mixed. It missed the consensus estimate in two of the last four quarters while beating the forecast on two other occasions.
Among the 19 analysts covering VMC stock, the consensus rating is a “Moderate Buy.” That’s based on 12 “Strong Buy” ratings, one “Moderate Buy,” and six “Holds.”
This consensus is more bullish than a month ago, when the stock had 11 “Strong Buy” ratings.
On November 7, UBS Group AG (UBS) analyst Steven Fisher initiated coverage of Vulcan Materials with a “Buy” rating and a $349 price target. Fisher anticipates Vulcan will benefit from a strengthening non-residential construction market in late 2025 and 2026, driving 3%-4% aggregates volume growth in 2026 and enhancing the company’s pricing power, which he believes is undervalued by the market.
The mean price target of $296.29 represents a 2.7% premium compared to VMC’s current price levels. The Street-high price target of $349 suggests an upside potential of 21%.
