Construction Partners’ FY21 Outlook Beats The Street; Analyst Stays Bullish

Construction Partners reported mixed 4Q results, as the company’s earnings came ahead of the Street’s estimates but revenues fell short of expectations. Meanwhile, the infrastructure development company’s FY21 sales outlook surpassed analysts’ projections. Shares rose 1.1% in Friday’s extended trading session after closing down 4.8% on the day.

Construction Partners’ (ROAD) 4Q EPS of $0.34 grew 6.3% year-over-year and topped analysts’ estimates of $0.30. However, revenues fell 5.3% year-over-year to $224.7 million and missed the Street consensus of $241.5 million.

Construction CEO Charles E. Owens said, “Our successful year was primarily driven by our disciplined approach to productivity at the project level and bidding processes, effective utilization of crews and equipment, vertical integration synergies and lower fuel costs.” He continued, “Heading into fiscal year 2021, our organization is well-positioned for continued growth. We see strength in the state funding programs across our geographic footprint, where the demand for road repair and maintenance are ongoing.” 

As for fiscal 2021, the company expects sales to generate between $950-1000 million, which is above the $859.25 million forecasted by analysts. (See ROAD stock analysis on TipRanks)

Following the results, Raymond James analyst Joshua Wilson maintained a Buy rating on the stock. The analyst said, “Initial FY21 guidance suggests solid growth, likely with a significant (but not yet quantified) contribution from the recent wave of acquisitions.”

Meanwhile, the Street has a bullish outlook on the stock with a Strong Buy analyst consensus. With shares up 64.2% year-to-date, the average price target stands at $23.50 and implies downside potential of about 15.2% to current levels.

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