Update shared on 29 Nov 2025
Analysts have lowered Knife River’s price target by $20 to $100, citing near-term headwinds from funding issues and weather conditions. Despite these challenges, a solid project backlog supports the long-term outlook.
Analyst Commentary
Recent research reflects a mix of optimism about Knife River's long-term positioning and caution regarding near-term challenges. Analysts have provided insight into both the company's operating environment and likely trajectory through 2026.
Bullish Takeaways
- Bullish analysts highlight Knife River's solid project backlog of $1.3B, which supports the company’s mid- and long-term revenue visibility.
- Exposure to early-cycle segments of building materials is viewed as attractive, particularly if interest rate cuts stimulate demand within cement, wallboard, and home improvement markets.
- Some believe home improvement could see an earlier rebound compared to broader construction, offering potential upside if consumer sentiment recovers faster than expected.
- Despite regional policy setbacks, ongoing infrastructure investments and stable demand in other markets reinforce confidence in the company’s core business model and execution capability.
Bearish Takeaways
- Bearish analysts warn that continued funding challenges, notably in Oregon, along with adverse weather in the Midwest and Northwest, are likely to pressure near-term results.
- The company's valuation has come under scrutiny given the lowered price targets, as execution risks rise while market conditions remain uncertain.
- Broader construction activity is expected to stay tepid, with a recovery not anticipated until late 2026 or beyond. This could potentially limit growth opportunities until then.
- Some express concern that legislative progress in transportation funding has been slower and smaller in scale than hoped, which dampens expectations for a near-term acceleration in public infrastructure projects.
What's in the News
- Knife River Corporation has narrowed its consolidated earnings guidance for 2025, projecting revenue between $3,100 million and $3,150 million, with expected net income in the range of $140 million to $160.5 million (Key Developments).
Valuation Changes
- Fair Value Estimate: Remains unchanged at $98.22 per share.
- Discount Rate: Slightly reduced from 8.54% to 8.53%.
- Revenue Growth: Remains effectively unchanged at 6.22%.
- Net Profit Margin: Stable at approximately 6.77%.
- Future P/E Ratio: Marginally decreased from 28.42x to 28.41x.
Disclaimer
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