EXP: Rationale for the split remains compelling

Research evidence excerpt

EXP: Rationale for the split remains compelling

Eagle Materials Inc

Structural Demand Driver:

• Data centers represent a new component of private non-residential construction that "didn't

exist 10, 15 years ago"

• Management noted there are "actual components of private non-res that are much more

meaningful than what people were expecting"

Broader Context:

• Data center development, along with continued public infrastructure spending, supported the

strong cement volume performance

• This demand helped drive performance even during what would "generally be a pretty slow

construction season"

Bottom line

The company views data center demand as a significant and sustainable tailwind that's

contributing meaningfully to their cement business performance across their operating regions.

Changes to our estimates

We adjust our numbers to account for Q4'26 actuals. We have raised our capex estimates to

$500m in FY27 (guidance: $490-525m), and reduced estimates to $250m in FY28 and $150m

in FY29, broadly in line with management's estimates once the Mountain and Duke capacity

expansion plans finish. Our revenue/EBITDA estimates rise by 1.4%/0.9% in FY27, as a result of

i) the updated Q4'26 numbers which came in higher than we anticipated, and ii) as we make

minor tweaks to our cement and wallboard volume and price estimates (slight tweak down to

cement pricing estimate given the slightly weak Q1 outturn).

We roll forward our price target to be calculated on FY27-29e estimates (previously FY26-28e).

As a result, our price target increases ~5% from $208 to $219. We reiterate our Sector Perform

recommendation.

Exhibit 1 - Estimate changes - EXP

Estimate Changes (Annual Forecasts)

Before After % Change

2026E 2027E 2028E 2026 2027E 2028E 2029E 2026 2027E 2028E 2029E