Brian Brophy, an analyst from Stifel Nicolaus, has initiated a new Hold rating on Eagle Materials (EXP).
Brian Brophy has given his Hold rating due to a combination of factors related to Eagle Materials’ current market conditions and future prospects. The company benefits from a strong position as a low-cost producer, thanks to its ownership of raw material supplies, and its cement operations in the US Heartland are largely shielded from import competition. Additionally, Eagle Materials is experiencing favorable pricing dynamics in its wallboard segment due to structural declines in synthetic gypsum supply.
However, there are some immediate challenges that have influenced the Hold rating. The company faces near-term risks from increased natural gas prices due to a cold winter, which may affect current quarter volumes. Furthermore, there are signs of softening in the housing market, where Eagle Materials has significant exposure, amid rising mortgage rates. These factors are expected to be temporary, potentially offering a favorable long-term entry point for investors.
Brophy covers the Industrials sector, focusing on stocks such as MasTec, MYR Group, and Quanta Services. According to TipRanks, Brophy has an average return of 1.8% and a 36.96% success rate on recommended stocks.
In another report released on February 20, Citi also reiterated a Hold rating on the stock with a $279.00 price target.