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Granite's JV Wins $97M Contract From NAVFAC, Fostering CAP Growth

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Granite Construction Incorporated’s (GVA - Free Report) prospects are benefiting from the state transportation budgets supported by the Federal infrastructure bill, especially in California, with solid demand in key areas of local assistance and capital outlay projects. The project win trajectory of the company is positioning it well through 2025 and beyond.

Further strengthening its top-line growth and Committed and Awarded Projects (CAP), Granite’s joint venture (JV) with Obayashi Corporation was recently selected by the Naval Facilities Engineering Command (NAVFAC) for an approximately $97 million contract.

GVA will be including the contract value in its first-quarter 2025 CAP.

More on GVA’s New Project

The JV has been selected by the NAVFAC for improving the Battery Energy Storage System (BESS) capabilities at Polaris Point, Guam. The project’s work scope includes the construction of a 17,000-square-foot facility and associated site work to house battery energy storage and a microgrid controller. The enhanced BESS will be interconnected with the existing electrical grid, which will provide clean power to the future Naval facilities.

The construction work for the project is expected to kickstart on March 20, 2025, and be completed by June 2028. The funding of the NAVFAC’s project is done by the Department of Defense.

Per Curt Haldeman, Granite's vice president of Regional Operations, “This project will ensure our continued growth in the Pacific, specifically in Guam. It will boost our strategic advantage and enhance our battery energy storage and microgrid portfolio for Granite.”

CAP – Growth Driver of Granite

Granite is focusing on growing a high-quality CAP portfolio on the back of a positive public funding environment and a resilient private market. It remains focused on best-value projects where it can leverage the established relationships in its home markets to deliver larger projects while minimizing risk.

CAP totaled $5.3 billion in 2024, reflecting a sequential decline of $324 million and a year-over-year decrease of $250 million. Despite this, bidding activity remained strong, with several major project awards anticipated to be added to CAP in the first half of 2025. Given the current market conditions, the company expects significant opportunities to expand CAP throughout the year.

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GVA’s shares have lost 18.1% year to date amid the macro uncertainties and tariff concerns compared with the Zacks Building Products - Heavy Construction industry’s 17% decline. The company believes that strong opportunities across public and private markets will likely foster growth in the upcoming period.

GVA’s Zacks Rank & Key Picks

Granite currently carries a Zacks Rank #4 (Sell).

Here are some better-ranked stocks from the Construction sector.

EMCOR Group, Inc. (EME - Free Report) currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

EME delivered a trailing four-quarter earnings surprise of 29%, on average. The stock has gained 15.1% in the past year. The Zacks Consensus Estimate for EME’s 2025 sales and earnings per share (EPS) implies an increase of 12.8% and 8.6%, respectively, from a year ago.

Gibraltar Industries, Inc. (ROCK - Free Report) currently carries a Zacks Rank #2 (Buy). ROCK delivered a trailing four-quarter earnings surprise of 1.8%, on average. The stock has lost 12.7% in the past year.

The Zacks Consensus Estimate for ROCK’s 2025 sales and EPS implies an increase of 9.8% and 15.5%, respectively, from a year ago.

Sterling Infrastructure, Inc. (STRL - Free Report) presently carries a Zacks Rank of 2. STRL delivered a trailing four-quarter earnings surprise of 16.2%, on average. The stock has rallied 5.2% in the past year.

The Zacks Consensus Estimate for STRL’s 2025 sales indicates a decrease of 4.1% and an increase of 20.5% for EPS from a year ago.

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