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Granite (GVA) Wins Contract to Upgrade Highway 101 in CA
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Granite Construction Incorporated (GVA - Free Report) has secured a Highway 101 upgrade contract from the California Department of Transportation (Caltrans) in Mendocino, CA. The project value is considered approximately $23 million and is funded by the Federal Highway Administration.
The project is anticipated to begin in the third quarter of 2023 and be completed by the second quarter of 2024. The project value is likely to be included in the company’s second-quarter 2023 Committed and Awarded Projects (CAP).
Per the deal, Granite is expected to upgrade four miles of median barrier and resurface a ten-mile section of Highway 101 between Ukiah and Willits, namely the Ridgewood Grade. Importantly, GVA’s North State Street Hot plant will supply 56,000 tons of Hot Mix Asphalt (HMA) and 38,000 tons of Rubberized HMA for this project.
Image Source: Zacks Investment Research
Shares of GVA declined slightly on Jul 18, in the after-hour trading session. Nonetheless, the stock has gained 40.3% in the past year, compared with the Zacks Building Products - Heavy Construction industry’s 47.4% growth. Although the shares of the company have underperformed its industry, the consistent contract wins will enable GVA to gain momentum in the upcoming period.
Solid CAP Synergies
The Construction segment and the performance of Granite’s operating segments showcased strong market growth in first-quarter fiscal 2023, with CAP reaching $5.1 billion. The upside was driven by the momentum in the most recent quarters, reflecting strategic expansion. 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 first quarter, the California Group reported CAP of $1.9 billion, up 29% from the prior year quarter levels. Despite budget challenges, bidding activity in the state remained robust, driven by the Federal Infrastructure Bill. The bill presented a range of opportunities.
Notably, three middle mile broadband infrastructure projects were awarded during this quarter, contributing $132 million to California's CAP. With California moving swiftly to capitalize on IIJA funding, Granite is well-positioned to partner with Caltrans in the construction of these projects.
MLM delivered a trailing four-quarter earnings surprise of 31%, on average. Shares of the company have gained 41.9% in the past year. The Zacks Consensus Estimate for MLM’s 2023 sales and earnings per share indicates growth of 18.7% and 32.3%, respectively, from the previous year’s reported levels.
TopBuild currently sports a Zacks Rank of 1. BLD delivered a trailing four-quarter earnings surprise of 12.9%, on average. Shares of the company have rallied 52.5% in the past year.
The Zacks Consensus Estimate for BLD’s 2023 sales and earnings per share indicates decline of 1.4% and 3.8%, respectively, from the previous year’s reported levels.
Dycom currently sports a Zacks Rank of 1. DY delivered a trailing four-quarter earnings surprise of 153.7%, on average. Shares of the company have risen 8.3% in the past year.
The Zacks Consensus Estimate for DY’s fiscal 2024 sales and earnings per share indicates growth of 8.3% and 41%, respectively, from the previous year’s reported levels.
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Granite (GVA) Wins Contract to Upgrade Highway 101 in CA
Granite Construction Incorporated (GVA - Free Report) has secured a Highway 101 upgrade contract from the California Department of Transportation (Caltrans) in Mendocino, CA. The project value is considered approximately $23 million and is funded by the Federal Highway Administration.
The project is anticipated to begin in the third quarter of 2023 and be completed by the second quarter of 2024. The project value is likely to be included in the company’s second-quarter 2023 Committed and Awarded Projects (CAP).
Per the deal, Granite is expected to upgrade four miles of median barrier and resurface a ten-mile section of Highway 101 between Ukiah and Willits, namely the Ridgewood Grade. Importantly, GVA’s North State Street Hot plant will supply 56,000 tons of Hot Mix Asphalt (HMA) and 38,000 tons of Rubberized HMA for this project.
Image Source: Zacks Investment Research
Shares of GVA declined slightly on Jul 18, in the after-hour trading session. Nonetheless, the stock has gained 40.3% in the past year, compared with the Zacks Building Products - Heavy Construction industry’s 47.4% growth. Although the shares of the company have underperformed its industry, the consistent contract wins will enable GVA to gain momentum in the upcoming period.
Solid CAP Synergies
The Construction segment and the performance of Granite’s operating segments showcased strong market growth in first-quarter fiscal 2023, with CAP reaching $5.1 billion. The upside was driven by the momentum in the most recent quarters, reflecting strategic expansion. 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 first quarter, the California Group reported CAP of $1.9 billion, up 29% from the prior year quarter levels. Despite budget challenges, bidding activity in the state remained robust, driven by the Federal Infrastructure Bill. The bill presented a range of opportunities.
Notably, three middle mile broadband infrastructure projects were awarded during this quarter, contributing $132 million to California's CAP. With California moving swiftly to capitalize on IIJA funding, Granite is well-positioned to partner with Caltrans in the construction of these projects.
Zacks Rank & Key Picks
Granite currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the Construction sector are Martin Marietta Materials, Inc. (MLM - Free Report) , TopBuild Corp. (BLD - Free Report) and Dycom Industries, Inc. (DY - Free Report) .
Martin Marietta currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
MLM delivered a trailing four-quarter earnings surprise of 31%, on average. Shares of the company have gained 41.9% in the past year. The Zacks Consensus Estimate for MLM’s 2023 sales and earnings per share indicates growth of 18.7% and 32.3%, respectively, from the previous year’s reported levels.
TopBuild currently sports a Zacks Rank of 1. BLD delivered a trailing four-quarter earnings surprise of 12.9%, on average. Shares of the company have rallied 52.5% in the past year.
The Zacks Consensus Estimate for BLD’s 2023 sales and earnings per share indicates decline of 1.4% and 3.8%, respectively, from the previous year’s reported levels.
Dycom currently sports a Zacks Rank of 1. DY delivered a trailing four-quarter earnings surprise of 153.7%, on average. Shares of the company have risen 8.3% in the past year.
The Zacks Consensus Estimate for DY’s fiscal 2024 sales and earnings per share indicates growth of 8.3% and 41%, respectively, from the previous year’s reported levels.