Stephens starts Knife River with an Overweight rating, $85 price target

As previously reported, Stephens initiated coverage of Knife River with an Overweight rating and $85 price target. The firm sees Knife River’s path to margin expansion primarily coming from its “ability to expand margins through price for their materials business, namely aggregates, as well as successfully passing on cost increases in their downstream businesses.” Additionally, Stephens believes Knife River’s “strong aggregates position in high-growth geographic markets, along with demand tailwinds in infrastructure, single-family residential and select nonresidential verticals could yield elevated margins in the contracting services segment and a higher-than-normal pricing growth environment for aggregates.”