Eagle Materials, Inc. (EXP) reported stronger-than-expected Q4 results along with a 150% jump in the quarterly dividend to $0.25. Q4 EPS of $1.56 beat the consensus estimate of $1.23. Shares of the building materials company have jumped 122% over the past year.
Eagle’s management, after consultation with external advisors, has decided not to proceed with the proposed split of the company into two independent, publicly-traded companies. Management believes that the combined entity, with a bigger scale and increased flexibility, will be better positioned to seek strategic growth opportunities and create long-term shareholder value.
Since last year, Eagle Materials had been contemplating dividing its heavy and light materials businesses.
Additionally, in April 2020, the company suspended the quarterly dividend of $0.10, citing its priority of reducing the company’s debt. The restored dividend is payable on July 16 to shareholders of record as of June 18.
Total revenues generated in the fourth quarter amounted to $343 million, versus the consensus estimate of $333.6 million. For the full year, total revenues grew 16% year-over-year to $1.6 billion. FY2021 EPS of $7.99 increased 46% versus $5.47 reported a year ago. (See Eagle Materials stock analysis on TipRanks)
Eagle Material’s CEO Michael Haack commented, “As we begin our new fiscal year, Eagle is well-positioned, both geographically and financially, with ample raw material reserves to capitalize on the underlying demand fundamentals that are expected to support steady and sustainable construction activity growth over the near and long-term. We remain confident in Eagle’s prospects for continued growth and sustainable value creation for all shareholders.”
Before the results announcement, Jefferies analyst Philip Ng upgraded the rating on the stock from a Hold to a Buy and increased the price target from $145 to $170 (22.1% upside potential).
Ng commented, “With the cement market sold out from an improving backdrop in public & strength in residential, there are rumblings for a second price increase, and we believe we’re on the cusp of a multi-year pricing cycle.”
Overall, the stock has a Strong Buy consensus rating based on 4 unanimous Buys. The average analyst price target of $166.25 implies 19.4% upside potential from current levels.
Furthermore, Eagle Materials scores a 9 out of 10 from TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.
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