VMC: Pre-Q2 Model Update

Research evidence excerpt

VMC: Pre-Q2 Model Update

Vulcan Materials Company

Target/Upside/Downside Scenarios Investment summary

Vulcan Materials Company is an Alabama corporation and theVulcan Materials Company

nation’s largest producer of construction aggregates: primarily

400 125 Weeks 06FEB24 - 26JUN26 crushed stone, sand, and gravel. The company has >360

aggregates facilities serving every region of the continental

350 United States. It is also a major producer of asphalt mix and

CURRENTCURRENT 311.35311.35

300 TARGETTARGET 293.00293.00 ready-mixed concrete with over 120 facilities.

We see the following key points as supporting our Sector

200 Perform rating:

15m • We anticipate pricing power to remain steady and demand

10m 5m relatively resilient compared to more residential-focused

2024 2025 2026 companies. We also expect public demand to continue as

F M A M J J A S O N D J F M A M J J A S O N D J F M

A M J government funding from both the federal level (FAST- VMC US Rel. S&P 500 COMPOSITE MA 40 weeks

Source: Bloomberg and RBC Capital Markets estimates for Target Act extension) and state level (VMC states are relatively

stronger) supports higher levels of public infrastructureValuation

spending. Longer-term, the federal infrastructure bill is aOur price target of $293/share is based on our CY’26E EBITDA

significant positive, although the flow through has remainedestimates, with a CY’26E EV/EBITDA multiple of 17.5x. We

slow and gradual.believe that VMC should trade at levels well above our average

• We anticipate aggregate margins to remain fairly strong astarget multiple for its building products peer group given

demand is relatively less impacted by a housing slowdownthe company’s leadership position in aggregates, which have

and pricing power persists.