Texas “Big 6” Highway Contract Could Be A Game Changer For Knife River (KNF)

• Knife River Corporation recently announced it has been awarded a US$112 million subcontract on the “Big 6” State Highway 6 improvement project near Bryan/College Station, Texas, supplying about 928,000 tons of hot-mix asphalt and paving work on a 12-mile expansion running through to an expected 2030 completion.
• This long-duration, infrastructure-heavy contract not only extends Knife River’s revenue visibility but also offers extra upside through potential on-call supply of sand, MSE backfill and base course to Fluor Corporation.
• We’ll now examine how this long-running, US$112 million Texas highway contract could reshape Knife River’s infrastructure-focused investment narrative and risk balance.

Find companies with promising cash flow potential yet trading below their fair value.

Knife River Investment Narrative Recap

To own Knife River, you need to believe in a long, infrastructure-led backlog translating into steadier earnings despite weather, funding and cost headwinds. The new US$112 million Big 6 Texas contract strengthens short term revenue visibility but does not remove key risks around public funding concentration, high debt and weather-driven margin pressure, especially in markets like Oregon and Texas. For now, it modestly supports the existing public-infrastructure catalyst rather than transforming the investment case.

The recent Mairs & Power Small Cap Fund commentary, highlighting slowdowns tied to federally funded construction programs and environmental delays, is particularly relevant alongside the Texas award. While Big 6 underscores Knife River’s positioning in large DOT projects, it also underlines how dependent the business remains on timely public infrastructure spending and project execution, which can be affected by politics, permitting and climate-related disruptions.

Yet, while the Texas contract extends visibility, investors still need to be aware of how heavily Knife River relies on sustained public DOT funding and...

Read the full narrative on Knife River (it's free!)

Knife River’s narrative projects $3.6 billion revenue and $264.4 million earnings by 2028. This requires 7.4% yearly revenue growth and about a $111 million earnings increase from $153.3 million today.

Uncover how Knife River's forecasts yield a $98.22 fair value, a 27% upside to its current price.

Exploring Other Perspectives

Two fair value estimates from the Simply Wall St Community span a wide range, from about US$27.56 to roughly US$98.22, underlining how far views can diverge. When you set those side by side with Knife River’s heavy exposure to public DOT funding and long dated projects like Big 6, it becomes clear why many investors compare several viewpoints before deciding how this could affect future performance.

Explore 2 other fair value estimates on Knife River - why the stock might be worth as much as 27% more than the current price!

Build Your Own Knife River Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Knife River research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.
• Our free Knife River research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Knife River's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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