Last Update 10 Jan 26

Fair value Increased 1.20%

VMC: Highway Spending And Firmer Margins Will Guide Shares Into 2026

Analysts have nudged their price expectations for Vulcan Materials higher, with the implied fair value moving from about $317.70 to $321.50 as they factor in updated price targets and see potential support from highway project spending and firmer margins.

Analyst Commentary

Recent research updates on Vulcan Materials highlight a mix of optimism around project activity and pricing, alongside some quieter caution around expectations in the broader machinery and construction group.

Bullish Takeaways

Bullish analysts are lifting price targets toward the low to mid US$300s, which signals confidence that the current valuation can be supported if the company executes on volume and pricing plans.
JPMorgan points to potential upside in volumes tied to accelerating highway project spending. If realized, this could support revenue growth without requiring aggressive price moves.
Expectations for slightly higher pricing are cited as a contributor to firmer margins. This suggests analysts see room for earnings quality to improve if cost discipline holds.
Within machinery and construction coverage, some analysts see Vulcan Materials as positioned to benefit as investors look at names where expectations are not already stretched.

Bearish Takeaways

While price targets have been nudged higher, the moves are incremental. This indicates that analysts are not treating Vulcan Materials as a high conviction outlier on growth or execution.
Comments that inventories are improving across the wider machinery group, especially in agriculture, hint that some peers may be catching up. This could cap relative valuation upside if Vulcan Materials does not out execute.
The idea that there is an "opportunity" in relative laggards stems from lower expectations, which cuts both ways. It implies that if Vulcan Materials were to miss on volumes or margins, sentiment could reset quickly.
With targets clustered around US$320 to US$340, the spread of analyst views is fairly tight. This suggests limited room for positive surprise before fresh evidence on project activity or pricing is available.

What's in the News

Vulcan Materials plans to pursue M&A opportunities focused on aggregate led targets, with management highlighting an active list of potential deals, while also noting that recent tariff related uncertainties and interest rate pauses have slowed transaction timing (Key Developments).
Chief Operating Officer Ronnie Pruitt emphasized that greenfield projects remain part of the company’s growth approach, with project timing influenced by permits and market conditions rather than a preset schedule (Key Developments).
From July 1, 2025 to September 30, 2025, the company reported no share repurchases under its buyback program, while total repurchases under the plan reached 11,596,125 shares, or 10.42%, for US$1,225.32m since its announcement on February 10, 2006 (Key Developments).
The Board of Directors appointed Ronnie Pruitt as Chief Executive Officer effective January 1, 2026, with current CEO J. Thomas Hill set to transition to Executive Chairman and continue working with Pruitt on a smooth handover (Key Developments).
Pruitt brings more than three decades in building materials, including prior roles as Vulcan’s Chief Operating Officer and CEO of U.S. Concrete, and has been closely involved in shaping the company’s growth plans and operating approach (Key Developments).

Valuation Changes

The fair value estimate has risen slightly from about US$317.70 to US$321.50, reflecting a modest uplift in the implied valuation range.
The discount rate is virtually unchanged, moving from 8.12% to 8.13%, which leaves the risk assumption in the model broadly intact.
The revenue growth assumption has eased slightly from about 7.67% to 7.63%, signaling a marginally more conservative top line outlook in the model.
The net profit margin has edged up from roughly 15.95% to 16.02%, indicating a small adjustment toward stronger profitability assumptions.
The future P/E multiple has moved slightly higher from 33.78x to 34.09x, implying a modestly richer valuation being applied to forward earnings in the updated analysis.

Expanding infrastructure investment and a dominant presence in high-growth metros are fueling sustained revenue growth and strong pricing power for Vulcan Materials.
Operational efficiencies, successful acquisitions, and rising demand from infrastructure and renewable projects are supporting margin expansion and long-term profitability.
Delayed construction recovery, regional weather risks, public funding reliance, reduced capital investment, and acquisition integration challenges could constrain near-term revenue growth and margin improvement.

Catalysts

About Vulcan Materials

Produces and supplies construction aggregates in the United States.What are the underlying business or industry changes driving this perspective?

Accelerating infrastructure spending-driven by the ongoing rollout of IIJA funding, major state initiatives in core Southern and Sunbelt markets, and increasing local spending-is visibly expanding Vulcan's backlogs and contract awards; with over 60% of IIJA funds still to be spent and awards up over 20% in Vulcan-served regions, this points to multi-year growth in volumes and more predictable, compounding revenue.
The company's dominant footprint in rapidly urbanizing and growing Sunbelt metros, coupled with a visible pipeline of large-scale public and private projects (notably data centers, highways, and non-residential), positions Vulcan to capture outsized volume recovery and expansion, directly benefiting revenue growth and sustaining robust pricing power.
Sustained operational discipline and efficiency improvements-including tighter cost control, effective price realization, and automation-continue to boost unit gross profit per ton and drive margin expansion, even in low-volume environments; incremental volumes as end markets recover should provide meaningful leverage to net margins and EBITDA.
Bolt-on acquisitions in key coastal and Sunbelt markets are integrating successfully, with price accretion already materializing; anticipated M&A acceleration paired with strong balance sheet capacity will further support earnings growth and enhance free cash flow generation.
Structural tailwinds from infrastructure resilience and the transition to green/renewable projects are driving long-term demand for aggregates in roads, storm-resistant infrastructure, and energy sites, enhancing Vulcan's long-term volume outlook and supporting higher blended pricing, which should lift both top-line revenue and profitability.

Vulcan Materials Earnings and Revenue Growth

Vulcan Materials Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Vulcan Materials's revenue will grow by 8.1% annually over the next 3 years.
Analysts assume that profit margins will increase from 12.6% today to 15.7% in 3 years time.
Analysts expect earnings to reach $1.5 billion (and earnings per share of $11.45) by about September 2028, up from $958.1 million today.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 33.2x on those 2028 earnings, down from 40.3x today. This future PE is greater than the current PE for the US Basic Materials industry at 24.1x.
Analysts expect the number of shares outstanding to remain consistent over the next 3 years.
To value all of this in today's terms, we will use a discount rate of 7.76%, as per the Simply Wall St company report.

Vulcan Materials Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Persistent delays and project deferrals in single-family residential construction, along with ongoing affordability challenges, could continue to weigh on residential aggregate volumes-potentially constraining revenue growth if that major end market does not recover as projected.
Greater reliance on Southeast markets, which experienced outsized negative impacts from extreme weather events, exposes Vulcan to heightened regional weather volatility and climate risk-raising the potential for future unanticipated disruptions to volumes, margins, and earnings.
Reduced CapEx guidance (lowered from prior expectations of $750-800M to around $700M) due to project timeline delays may indicate ongoing operational or permitting hurdles, potentially leading to slower asset modernization and affecting long-term cost competitiveness and free cash flow.
Public infrastructure growth is heavily reliant on continued government funding such as IIJA and future highway bills-any changes in political priorities, delays in funding dispersal, or failure to renew/expand such funding pose a risk to long-term revenue visibility and margin expansion.
Recent acquisitions (especially in North Carolina and California) face a lag in reaching Vulcan's pricing standards, and unfavorable geographic and product mix due to these acquisitions and weather-impacted shipments could compress average selling prices or delay anticipated margin improvements, impacting near
to mid-term profitability.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $304.048 for Vulcan Materials based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $340.0, and the most bearish reporting a price target of just $190.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $9.6 billion, earnings will come to $1.5 billion, and it would be trading on a PE ratio of 33.2x, assuming you use a discount rate of 7.8%.
Given the current share price of $292.44, the analyst price target of $304.05 is 3.8% higher. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

Highway Project Spending And Pricing Trends Will Sustain Balanced Opportunity Ahead