Headquartered in Birmingham, Alabama, Vulcan Materials Company (VMC) produces, distributes, and sells construction aggregates and materials in the U.S. and Mexico. Commanding a market cap of $32.5 billion, it operates in four segments: Aggregates, Asphalt Mix, Concrete, and Calcium. The company's end users include public and private construction projects.
Companies valued at $10 billion or more are generally labeled as “large-cap” stocks, and Vulcan Materials fits this criterion perfectly. Vulcan Materials is the largest producer of construction aggregates in the U.S., with 397 facilities and strategic locations in high-growth areas ensuring steady demand. VMC's success is further bolstered by its Vulcan Way of Operating, emphasizing continuous improvement and safety, and its Commercial Excellence & Logistics Innovation, which enhances customer service and profitability.
Despite its strong market position, Vulcan Materials slid 10.4% from its 52-week high of $276.58, set on March 27. Shares of Vulcan Materials have declined 9.2% over the past three months, significantly underperforming the broader Nasdaq Composite's ($NASX) 8.9% gains over the same time frame.
In the long term, VMC stock is up 9.1% on a YTD basis, lagging behind the NASX's 19% gains. Moreover, shares of Vulcan Materials have gained 12.4% over the past 52 weeks, compared to NASX's 31.7% return over the same time frame.
To confirm the bearish price trend, VMC has been trading below its 50-day moving average since late May and under its 200-day moving average since mid-May.
VMC has been underperforming due to pressing weather challenges and macroeconomic headwinds, compounded by lower aggregate shipments in the recent quarter.
However, the stock jumped 1.8% on May 2, following the release of its Q1 earnings, where it announced an adjusted EPS of 80 cents and a revenue of $1.5 billion, both topping Wall Street estimates. Management anticipates the company’s adjusted EBITDA to range between $2.2 billion and $2.3 billion in fiscal 2024, marking the fourth consecutive year of double-digit growth.
Meanwhile, its rival, Martin Marietta Materials, Inc. (MLM), has gained 19.1% over the past 52 weeks, outperforming VMC over the same time frame. However, on a YTD basis, MLM stock has surged 7.9%, lagging behind VMC’s gain in 2024.
Despite VMC’s underperformance relative to the Nasdaq Composite, analysts remain cautiously optimistic about its prospects. Among the 18 analysts covering the stock, there is a consensus rating of “Moderate Buy,” and the mean price target of $294.75 suggests a premium of 19% to current price levels.
On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
