GVA - Granite Construction Incorporated
Price:
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CONSENSUS:
Buy
DETAILS
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PRICE TARGET:
$143.50
DETAILS
HIGH:
$155.00
LOW:
$132.00
MEDIAN:
$143.50
CONSENSUS:
$143.50
UPSIDE:
10.43%
AlphaVal
Deterministic, archetype-aware fair value
Cyclical & Capital-Intensive
80% confidence
Primary model: Normalized Earnings × Cycle Multiple
Adjust Assumptions
18.0x
1.7$
Key Value Driver
Through-cycle normalized EPS ($1.70)
Implied Market Multiple
76.4x
Plain-Language Summary
Our base-case estimate uses Normalized Earnings × Cycle Multiple. We then blend that result with the average analyst price target of $143.50 from 14 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $49.10 per share.
Warnings
This company has a built-in lending arm whose debt is mixed in with the main business. We capped the debt adjustment to avoid overstating what the core business owes.
Recent profits ($3.63/share) are 114% above the mid-cycle average ($1.70). Buying based on peak profits is the most common mistake with boom-and-bust businesses.
Price-to-book value of 9.5x is above the normal range for this type of business (0.7x-2.0x). The stock may already price in a strong cycle.
Wall Street's average price target is $143.50 (from 14 analysts). Our estimate is 82% below the consensus -- consider that gap carefully.
Key Risks
- Standard 10-year DCF produces unreliable terminal values for cyclicals
- 'Cheap' P/E at cycle peak is the most common value trap — normalize first
- Captive finance subsidiaries have different risk profiles from manufacturing