Seaport Global Securities Upgrades Granite Construction (GVA) to Buy

Seaport Global Securities upgraded Granite Construction (NYSE: GVA) from Neutral to Buy with a price target of $60.00 (from $49.00).

Analyst Ryan Cassil commented, "We are upgrading shares of GVA to Buy (from Neutral) and increasing our price target to $60 (from $49) as record backlog growth with several catalysts for additional growth remain in place and expectations for near-term margin improvement have moderated. We believe that current backlog of $3.75B and additional catalysts from FAST/CA state spending can support ~$4.00 of EPS in 2018, putting our price target at a mid-teens multiple. GVA's reported adjusted EPS of $0.35 was short of our estimate of $0.44 and consensus of $0.46. Management reiterated 2016 guidance of mid-single-digit revenue growth and a consolidated EBITDA margin between 6%-8%. It reported record backlog growth of 25% YoY to $3.75B while expectations for margins came in below investor expectations and are expected to remain below target levels for the next 2-3 quarters as the portfolio continues to mature."

For an analyst ratings summary and ratings history on Granite Construction click here. For more ratings news on Granite Construction click here.

Shares of Granite Construction closed at $49.78 yesterday.

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