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Granite (GVA) Wins $215M NSIT Contract, Fortifies Q3 CAP

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Granite Construction Incorporated (GVA - Free Report) secures a $215 million contract from Akron, OH, to build the Northside Interceptor Tunnel Project (NSIT).

Funded by the Ohio Environmental Protection Agency’s Water Pollution Control Loan Fund, the NSIT will help prevent combined sewer overflows from entering the Cuyahoga River during typical storms. NSIT is an important part of the U.S. Environmental Protection Agency’s mandated Consent Decree and will transform the city's sewer infrastructure.

The deal is expected to be included in Granite’s third-quarter Committed and Awarded Projects ("CAP"). The work will begin in September 2023 and is expected to be completed in July 2027.

Zacks Investment Research
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Shares of GVA rose 0.35% in the after-hours trading session and 13.7% in the past three months compared with the Zacks Building Products - Heavy Construction industry’s 14.6% growth. Although its shares have underperformed the industry, consistent contract wins will enable GVA to gain momentum in the upcoming period.

Solid CAP Synergies

The performance of Granite’s operating segments showcased strong market growth in second-quarter fiscal 2023, benefiting from a strong public funding environment, with California leading the way. CAP reached $5.4 billion in the second quarter, a sequential increase of $334 million and year-over-year growth of $1.2 billion. Despite unfavorable weather conditions, the company's strategic approach of selective bidding resulted in increased margins and a higher number of projects won in the quarter.

During the fiscal second quarter, the California unit reported CAP of $2.35 billion, up 22.6% sequentially and 43.9% from the prior-year quarter. Despite budget challenges, bidding activity in the state remained robust, driven by the Federal Infrastructure Bill. The bill presented a range of opportunities.

Zacks Rank & Key Picks

GVA carries a Zacks Rank #3 (Hold).

Sterling Infrastructure, Inc. (STRL - Free Report) provides transportation, e-infrastructure and building solutions. The Zacks Consensus Estimate for STRL’s 2023 earnings has moved north to $4.09 per share from $3.52 in the past seven days.

STRL’s expected earnings growth rate for 2023 is 29.4% and it sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Fluor Corporation (FLR - Free Report) benefits from its diverse presence in various markets, which allows it to reduce the impact of market fluctuations. The company adopts a strategic approach by maintaining a well-balanced business portfolio, enabling it to prioritize stable markets while taking advantage of opportunities in cyclical markets when the timing is appropriate.

FLR presently sports a Zacks Rank #1. Its expected earnings growth rate for 2023 is 128.1%.

Willdan Group (WLDN - Free Report) is a nationwide provider of professional, technical and consulting services to utilities, government agencies and private industry.

Willdan Group presently flaunts a Zacks Rank #1. WLDN’s expected earnings growth rate for 2023 is 50%. The Zacks Consensus Estimate for STRL’s 2023 earnings has moved north to $1.32 per share from $1.23 in the past 30 days.

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