Wolfe starts Knife River at Peer Perform on ‘rich’ valuation

Wolfe Research initiated coverage of Knife River with a Peer Perform rating and no price target. The analyst has a positive view on the company’s infrastructure demand, margin growth, and potential to be a takeout candidate. However, on the negative side, the stock’s valuation looks rich and infrastructure spending can disappoint, the analyst tells investors in a research note. Wolfe sees multi-year strength in government infrastructure spending supporting volumes. While pricing power remains solid, double-digit annual price hikes is not the new normal, the firm contends.