Update shared on 12 Nov 2025
Fair value Increased 2.65%Analysts have raised their price target for Granite Construction to $135.50 from $132.00, citing improved margins, record CAP, and strong booking momentum. This increase comes despite slightly slower recent revenue growth.
Analyst Commentary
Bullish Takeaways- Bullish analysts are raising price targets based on the company's margin improvements and strong cash flow generation. Both factors support higher valuations.
- Record capital acquisition program (CAP) levels and robust booking momentum provide high confidence in long-term growth and visibility through 2026.
- Recent performance demonstrates that management's strategic initiatives continue to drive substantially better results across key financial metrics.
- Healthy incoming bookings indicate sustained demand, positioning the company well for continued operational execution and expansion.
- Some analysts note that revenue growth in the latest quarter was somewhat slower than anticipated. This was largely due to timing delays in ramping up new projects.
- Short-term execution risks remain, particularly as the company manages transitions between project cycles and new work coming online.
- While long-term prospects are strong, visibility and momentum could be affected if there are ongoing delays in executing large contracts or if macroeconomic conditions shift.
What's in the News
- Granite Construction is pursuing further acquisitions, following recent purchases of Warren Paving, Papich Construction, and Cinderlite. The company expects to complete several acquisitions annually in the coming years (2025 Second Quarter Conference Call).
- The company narrowed its 2025 revenue guidance to $4.35 billion to $4.45 billion, reduced from the previous upper range of $4.55 billion (Company Guidance Update).
- Granite was selected by the Illinois Department of Transportation for a $350 million CM/GC contract to enhance drainage along Chicago’s Eisenhower Expressway. Major preconstruction is scheduled to begin in late 2025 (Client Announcement).
- The company secured a $70 million contract at Tucson International Airport to construct a new runway and support safety enhancements as part of a $400 million multi-year program (Client Announcement).
- Work began on a $138 million rehabilitation of Chicago’s historic Lake Street Bascule Bridge, a vital part of the city’s transit and road infrastructure. Completion is slated for December 2027 (Business Expansion Announcement).
Valuation Changes
- Consensus Analyst Price Target has increased to $135.50 from $132.00, reflecting improved outlooks for Granite Construction.
- Discount Rate has risen slightly, moving from 8.66% to 9.37%. This suggests higher perceived risk or changing market conditions.
- Revenue Growth projections have declined from 10.80% to 10.13%. This indicates a slightly more cautious outlook for top-line expansion.
- Net Profit Margin estimate has fallen significantly from 8.03% to 6.49%. This points to expectations for somewhat lower profitability.
- Future P/E ratio has increased from 16.73x to 20.77x. This signals that shares are expected to trade at higher earnings multiples.
Disclaimer
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