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Eagle Materials Inc (EXP)
NYSE:EXP
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Eagle Materials
(NYSE:EXP)
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Rating:70Outperform
Price Target:
$255.00
▲(8.79% Upside)
EXP scores well on underlying profitability and operating cash generation, supported by constructive technicals. The score is held back by weakening near-term fundamentals (revenue/margins and free cash flow), increased leverage, and ongoing Wallboard softness highlighted on the earnings call; valuation is fair with minimal dividend support.
Positive Factors
High Profitability & Margins
Sustained TTM operating (~27%) and net (~19%) margins demonstrate durable pricing power and cost control across cycles. Strong margins support high returns on capital, enable funding of modernization and shareholder returns, and provide resilience against near-term demand softness.
Heavy Materials Growth & Scale
Double-digit Heavy Materials growth, 9% cement volume gains and record aggregates volumes highlight scalable core businesses. This structural strength diversifies revenue away from weaker wallboard, reinforces regional market positions, and supports long-term utilization and pricing stability.
Strong Cash Generation & Liquidity
Robust operating cash conversion and ~ $1.2B committed liquidity, plus $419M cash, give the company durable financial flexibility. A $750M 10‑yr note issuance further extends maturities, enhancing ability to fund capex, weather downturns and maintain disciplined capital allocation over the medium term.
Negative Factors
Light Materials (Wallboard) Weakness
Material and persistent declines in wallboard volumes, prices and earnings reflect structural softness in new residential construction in key markets. Continued underperformance in Light Materials reduces business diversification, compresses consolidated margins and could prolong earnings recovery.
Increased Leverage
Material increase in leverage raises financial risk and reduces strategic optionality. Higher debt ratios increase interest exposure and limit flexibility to absorb cyclical revenue declines or accelerate discretionary investments without pressuring credit metrics or raising financing costs.
Free Cash Flow Pressure & Elevated Capex
Weakened FCF conversion (FCF <50% of net income) coupled with elevated modernization capex creates sustained pressure on cash available for buybacks, dividend growth or debt reduction. Persistent FCF volatility can constrain capital allocation during industry cyclicality.
Eagle Materials (EXP) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$7.28B
Dividend Yield0.47%
Average Volume (3M)508.85K
Price to Earnings (P/E)17.5
Beta (1Y)1.11
Revenue Growth1.50%
EPS Growth-4.44%
CountryUS
Employees2,500
SectorBasic Materials
Sector Strength58
IndustryConstruction Materials
Share Statistics
EPS (TTM)3.39
Shares Outstanding31,432,138
10 Day Avg. Volume474,599
30 Day Avg. Volume508,852
Financial Highlights & Ratios
PEG Ratio13.71
Price to Book (P/B)5.09
Price to Sales (P/S)3.28
P/FCF Ratio20.97
Enterprise Value/Market Cap1.21
Enterprise Value/Revenue3.83
Enterprise Value/Gross Profit13.53
Enterprise Value/Ebitda11.30
Forecast
1Y Price Target
$227.43Price Target Upside-2.97% Downside
Rating ConsensusHold
Number of Analyst Covering8
EPS Forecast (FY)13.06
Revenue Forecast (FY)$2.28B
Eagle Materials Business Overview & Revenue Model
Company DescriptionEagle Materials Inc., through its subsidiaries, produces and supplies heavy construction materials and light building materials in the United States. It operates through Cement, Concrete and Aggregates, Gypsum Wallboard, and Recycled Paperboard segments. The company engages in the mining of limestone for the manufacture, production, distribution, and sale of Portland cement; grinding and sale of slag; and mining of gypsum for the manufacture and sale of gypsum wallboards used to finish the interior walls and ceilings in residential, commercial, and industrial structures. It also manufactures and sells recycled paperboard to gypsum wallboard industry and other paperboard converters, as well as containerboard and lightweight packaging grades. In addition, the company engages in the sale of ready-mix concrete; and mining, extracting, production, and sale of aggregates, including crushed stones, sand, and gravel. Its products are used in commercial and residential construction; public construction projects; and projects to build, expand, and repair roads and highways. The company was formerly known as Centex Construction Products, Inc. and changed its name to Eagle Materials, Inc. in January 2004. Eagle Materials Inc. was founded in 1963 and is headquartered in Dallas, Texas.
How the Company Makes MoneyEagle Materials generates revenue primarily through the sale of cement, concrete, wallboard, and aggregates. The company's cement division is a key revenue driver, as it supplies cement to various construction projects across the U.S. The concrete segment contributes by providing ready-mixed concrete for residential and commercial applications. Additionally, the wallboard division caters to the growing demand in the housing market, while the aggregates segment supplies essential materials for construction. The company benefits from strategic partnerships with contractors and builders, which enhances its market presence and ensures steady demand for its products. Factors such as construction activity, housing market trends, and infrastructure development initiatives also significantly influence the company’s earnings.
Eagle Materials Earnings Call Summary
Earnings Call Date:Jan 29, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:May 14, 2026
Earnings Call Sentiment Positive
The call highlights strong performance and momentum in the Heavy Materials business (double-digit segment revenue growth, record aggregates volumes), solid cash generation, improved capital structure (including $750M bond issuance), active shareholder distributions, and measurable progress on high-return modernization projects and recycling initiatives. These positives are tempered by notable weakness in the Light Materials/Wallboard segment — with revenue down 16%, operating earnings down 25%, shipments down ~14%, and price pressure — which drove a 10% decline in EPS. Regional competitive pressures (notably Texas and import-exposed coastal markets), higher near-term capital spending for modernization projects, and short-term commodity/weather exposures add caution. Overall, the company appears financially strong and operationally resilient, with growth levers underway that offset the cyclical weakness in wallboard.Q3-2026 Updates
Positive Updates
Solid Revenue and Profitability
Reported Q3 revenue of $556 million and gross profit margin of 28.9%; generated EPS of $3.22 while navigating a mixed construction environment.
Heavy Materials Growth
Heavy Materials revenue increased 11%; cement sales volume rose 9%; concrete & aggregates revenue up 22%; aggregate sales volume a record 1.6 million tons (up 81% overall, 34% organic plus contribution from a recent acquisition). Operating earnings in Heavy Materials rose 9%.
Strong Cash Flow and Liquidity
Operating cash flow for first 9 months rose 5% to $512 million; ended quarter with $419 million cash and approximately $1.2 billion in total committed liquidity; net debt-to-EBITDA leverage ratio of 1.8x and net debt-to-capital at 48%.
Capital Structure Strengthened
Issued $750 million of 10-year senior notes at 5%, improving debt maturity profile and increasing committed liquidity; used proceeds in part to repay bank credit facility.
Active Capital Allocation to Shareholders and Growth
Returned nearly $150 million to shareholders in the quarter via dividends and repurchases (approximately 648,000 shares this quarter; ~1.4 million shares repurchased YTD, ~4% of outstanding); ~3.3 million shares remain under authorization. Continuing disciplined mix of organic investment (major projects) and selective M&A.
Progress on Strategic Projects and Operational Initiatives
Advancing modernization of Mountain (Laramie) Cement plant and Duke, OK Wallboard plant (Laramie commissioning late calendar year; Duke commissioning in H2 2027). Multiple low-capex initiatives converting waste streams into feedstock or higher-value products (cement waste reclamation, aggregates fines/overburden reuse, Republic paper mill repurposing, American Gypsum recycling ~100% of waste wallboard).
Industry-Leading Safety and Operational Readiness
Maintained strong safety culture and industry-leading safety record; teams prepared for winter weather and natural gas exposure is hedged (>50% through the winter) to mitigate short-term fuel cost spikes.
Negative Updates
Wallboard Revenue and Earnings Decline
Light Materials revenue decreased 16% to $203 million; operating earnings in the sector fell 25% to $73 million, driven primarily by lower wallboard sales volumes and prices.
Wallboard Volume and Price Pressure
Wallboard shipments down ~14% in the quarter; wallboard sales prices declined ~5% year-over-year and saw a sequential decline (approximately 3% sequential), reflecting ongoing weakness in new residential construction demand.
Earnings Per Share Impacted
Q3 EPS of $3.22 was down 10% versus prior-year quarter, largely due to lower net earnings from the weak wallboard market (partially offset by share repurchases which reduced fully diluted shares by ~5%).
Regional Competitive Pressures (Texas & Coastal Markets)
Texas cement market experienced heightened competitive pressure (including pricing and market structure changes); coastal regions face import-related competition that can affect pricing and margins in certain markets.
Higher Capital Spending for Major Projects
Capital spending increased to $295 million YTD (driven by Mountain Cement and Duke Wallboard modernizations), with full-year fiscal 2026 capex expected $430–$450 million; timing uncertainty remains and prior internal forecasts were closer to $500M due to project timing.
Short-Term Commodity & Weather Risks
Natural gas price spikes during winter could pressure Wallboard costs if not for hedges; winter weather can impact timing and realization of announced price increases and near-term volume trends.
Company Guidance
Eagle's guidance emphasized disciplined capital allocation and liquidity while progressing major projects: FY2026 capital spending is expected to be $430–$450 million (YTD capex $295M), operating cash flow for the first 9 months was $512M, and the company issued $750M of 10‑year senior notes at 5% while ending 12/31/25 with $419M cash and ~ $1.2B total committed liquidity (net debt/EBITDA 1.8x; net debt-to-cap 48%); Q3 results showed $556M revenue, $3.22 EPS (down 10%), 28.9% gross margin, heavy materials revenue +11% (cement volume +9%, concrete & aggregates revenue +22%, aggregates volume +81% to a record 1.6M tons), light materials revenue down 16% to $203M and segment operating earnings down 25% to $73M, the company announced ~$8/ton cement price increases in most markets effective early 2026 (ex‑Texas/Far West), maintains >50% natural gas hedges through winter, returned nearly $150M to shareholders in the quarter (≈648k shares repurchased; ~1.4M shares repurchased YTD ≈4% of outstanding; ~3.3M shares remaining authorization), and reiterated commissioning timelines for Laramie late calendar 2026 and Duke in H2 2027.Eagle Materials Financial Statement Overview
Summary
Above-average fundamentals supported by strong profitability (TTM operating margin ~27%, net margin ~19%) and solid operating cash generation (>2x net income). Offsetting this, TTM revenue declined ~9%, margins are down from prior-year highs, free cash flow weakened meaningfully, and leverage increased (debt-to-equity ~1.21 vs ~0.88), raising risk in a softer demand environment.Income Statement
Profitability remains a key strength, with TTM (Trailing-Twelve-Months) operating and net margins still solid (about 27% and 19%, respectively), reflecting strong pricing and cost control for the industry. However, the near-term trajectory has weakened: TTM revenue declined about 9% versus the prior period and margins stepped down from the last annual report, suggesting a softer demand backdrop and some incremental pressure on earnings power.78
Positive
Balance Sheet
The balance sheet is generally sound with strong returns on equity (high-20% to low-30% range recently), but leverage has moved up. Total debt increased materially in the latest TTM period, and debt-to-equity rose to ~1.21 versus ~0.88 last year, reducing flexibility if end markets weaken further.69
Positive
Cash Flow
Cash generation is healthy, with operating cash flow running more than 2x net income in recent periods, indicating good cash conversion at the operating line. The main weakness is free cash flow consistency: TTM free cash flow is notably below net income (under 50%) and has declined sharply versus the prior period, pointing to higher capital spending or working-capital needs that are dampening cash available for buybacks, debt paydown, or dividends.72
Positive
| Breakdown | TTM | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 | Mar 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.30B | 2.26B | 2.26B | 2.15B | 1.86B | 1.62B |
| Gross Profit | 650.83M | 673.14M | 685.32M | 639.27M | 519.61M | 408.36M |
| EBITDA | 779.18M | 792.63M | 811.07M | 762.74M | 634.82M | 597.68M |
| Net Income | 430.13M | 463.42M | 477.64M | 461.54M | 374.25M | 339.44M |
Balance Sheet | ||||||
| Total Assets | 3.84B | 3.26B | 2.95B | 2.78B | 2.58B | 2.84B |
| Cash, Cash Equivalents and Short-Term Investments | 419.00M | 20.40M | 34.92M | 15.24M | 19.42M | 263.52M |
| Total Debt | 1.80B | 1.28B | 1.12B | 1.12B | 974.60M | 1.05B |
| Total Liabilities | 2.35B | 1.81B | 1.64B | 1.60B | 1.45B | 1.48B |
| Stockholders Equity | 1.49B | 1.46B | 1.31B | 1.19B | 1.13B | 1.36B |
Cash Flow | ||||||
| Free Cash Flow | 231.81M | 353.27M | 443.63M | 431.58M | 443.05M | 589.14M |
| Operating Cash Flow | 574.80M | 548.55M | 563.94M | 541.73M | 517.17M | 643.07M |
| Investing Cash Flow | -492.95M | -370.13M | -175.36M | -268.59M | -74.12M | 37.09M |
| Financing Cash Flow | 305.98M | -192.94M | -368.90M | -277.31M | -692.15M | -530.29M |
Eagle Materials Technical Analysis
Positive
234.40
Price Trends
222.41
Positive
222.26
Positive
221.29
Positive
Market Momentum
3.17
Negative
58.83
Neutral
70.08
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EXP, the sentiment is Positive. The current price of 234.4 is above the 20-day moving average (MA) of 224.14, above the 50-day MA of 222.41, and above the 200-day MA of 221.29, indicating a bullish trend. The MACD of 3.17 indicates Negative momentum. The RSI at 58.83 is Neutral, neither overbought nor oversold. The STOCH value of 70.08 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for EXP.
Eagle Materials Risk Analysis
Eagle Materials disclosed 15 risk factors in its most recent earnings report. Eagle Materials reported the most risks in the "Production" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Eagle Materials Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $39.55B | 36.91 | 12.99% | 0.67% | 6.54% | 32.48% | |
70 Outperform | $7.28B | 17.53 | 28.77% | 0.47% | 1.50% | -4.44% | |
69 Neutral | $39.91B | 35.25 | 10.65% | 0.51% | 1.99% | -41.08% | |
65 Neutral | $5.14B | 32.07 | 9.71% | ― | 5.52% | -25.56% | |
64 Neutral | $967.93M | 21.09 | 16.04% | 5.46% | 9.24% | 24.01% | |
63 Neutral | $3.03B | 22.66 | 23.80% | 0.19% | 20.27% | 31.94% | |
61 Neutral | $10.43B | 7.12 | -0.05% | 2.87% | 2.86% | -36.73% |
* Basic Materials Sector Average
EXP
Eagle Materials
234.40
2.55
1.10%
CPAC
Cementos Pacasmayo SAA
10.56
5.22
97.75%
MLM
Martin Marietta Materials
675.40
172.27
34.24%
USLM
United States Lime & Minerals
107.47
6.53
6.47%
VMC
Vulcan Materials
302.85
46.17
17.99%
KNF
Knife River Corporation
88.26
-13.09
-12.92%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.