Eagle Materials' (EXP) JV to Open Slag Cement Facility in Texas
Eagle Materials Inc.‘s EXP arm to expand its business operation with a start-up of a new slag cement facility in Houston, TX, this summer.
Post completion, the plant will have an annual manufacturing capacity of approximately 500,000 tons that will supplement Texas Lehigh’s cement manufacturing plant in Buda.
Texas Lehigh aims to be the cementitious materials supplier of choice in the Texas market. The company’s recent expansion will help it meet the expected increase in demand for cementitious materials and their alternatives and reduce the carbon intensity of its overall product portfolio.
Texas Lehigh is a 50/50 joint venture or JV between Eagle Materials and Heidelberg Materials North America.
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Shares of EXP lost 2.7% on Apr 9, post the news release.
Eagle Materials’ Primary Growth Drivers
Eagle Materials is benefiting from the solid demand for public and private non-residential construction. Given the company’s nature of business, an increase in infrastructure spending directly elevates the demand for cement and aggregates. The business is divided into two sectors, Heavy Materials and Light Materials, which distinctively add to its growth trend.
The company is expected to reap benefits in the upcoming period from solid non-residential construction activities and incremental federal funding from the enacted Infrastructure Investment and Jobs Act. Also, resilient pricing, given the growth in all its product lines, is expected to support its growth trend.
In December 2023, Eagle Materials entered into exclusive agreements with Terra CO2 for the prospective deployment of several eco-friendly, low-carbon cementitious commercial-scale plants.
EXP is optimistic about its long-term growth, thanks to improving trends in population growth, well-documented housing production deficits and supply shortages, and a multi-year federal highway bill further boosted by state-level infrastructure spending.
Shares of this leading U.S. manufacturer of heavy construction products and light building materials have gained 27.8% so far this year, outperforming the Zacks Building Products - Concrete and Aggregates industry’s 20% growth.
Zacks Rank & Other Stocks to Consider
Currently, EXP carries a Zacks Rank #2 (Buy).
Here are some other top-ranked stocks in Zacks Construction sector:
Willdan Group, Inc. WLDN currently sports a Zacks Rank #1 (Strong Buy). WLDN delivered a trailing four-quarter average earnings surprise of a whopping 886.3%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for WLDN’s 2024 sales and earnings per share (EPS) indicates growth of 3.9% and 3.4%, respectively, from the year-ago levels.
Vulcan Materials Company VMC currently sports a Zacks Rank of 1. VMC delivered a trailing four-quarter earnings surprise of 19.5%, on average.
The Zacks Consensus Estimate for VMC’s 2024 sales and EPS indicates an improvement of 1.3% and 19.7%, respectively, from a year ago.
Sterling Infrastructure, Inc. STRL presently sports a Zacks Rank #1. Sterling Infrastructure has a trailing four-quarter earnings surprise of 20.4%, on average.
The Zacks Consensus Estimate for STRL’s 2024 sales and EPS indicates a rise of 11.7% and 11.4%, respectively, from the prior-year levels.
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