Analysts Boost Construction Partners Target on Acquisition Strength and Revised Financial Outlook

Analysts have raised their price target for Construction Partners from $120 to $124 per share, citing growing confidence in recent higher-margin acquisitions as well as the expectation of new long-term financial targets driving potential upside.

Analyst Commentary

Recent research has highlighted both strengths and areas for caution regarding Construction Partners' outlook following notable upgrades and increased price targets.

• Bullish analysts are increasingly optimistic about the company’s recent acquisitions in Texas and Tennessee, viewing them as delivering higher profit margins than initially forecast.
• Materially increased earnings estimates suggest that the stock remains attractively valued at current levels.
• The anticipated announcement of new long-term financial targets is seen as a potential catalyst for additional share price upside.
• Strong acquisition integration and execution are expected to drive robust growth and improve overall profitability.

• Some analysts remain watchful regarding the company’s ability to consistently deliver higher margins from new acquisitions over the long run.
• Caution persists over integration risk associated with rapid expansion into new regions, which could impact operational efficiencies.
• There is uncertainty surrounding the exact timing and impact of the upcoming long-term financial targets. This could create volatility if expectations are not met.

What's in the News

• Acquired eight hot-mix asphalt plants, crews, and equipment in the Houston, Texas metro area from Vulcan Materials Company. This expands operations as part of Durwood Greene Construction Co. (Key Developments)
• Announced the continuation of buyback activity, repurchasing 7,393 shares for $0.67 million in Q2 2025. This brings the total to 293,111 shares and $18.52 million under the current program. (Key Developments)
• Maintained fiscal year 2025 earnings guidance, with projected revenue between $2.77 billion and $2.83 billion and net income between $106 million and $117 million. (Key Developments)
• Held an Analyst/Investor Day focused on strategic initiatives, growth priorities, organizational achievements, and the business outlook. (Key Developments)
• Continues to pursue strategic acquisitions, with management signaling an emphasis on both organic growth and expansion into new markets. (Key Developments)

Valuation Changes

• Consensus Fair Value has risen slightly from $120.17 to $123.83 per share. This reflects increased optimism about company prospects.
• Discount Rate has increased marginally from 8.65% to 8.74%. This suggests a modest reassessment of risk or cost of capital.
• Revenue Growth projection has decreased slightly, moving from 18.26% to 18.00% year-over-year.
• Net Profit Margin is now expected to improve modestly, increasing from 7.06% to 7.15%.
• Future P/E ratio estimate has gone up from 30.14x to 30.95x. This indicates expectations for higher earnings multiples.