Gibraltar Industries, Inc. ROCK is benefiting from strategic operational initiatives and high contributions from the Infrastructure segment. Also, growth prospects of the Residential and Agtech segments are added tailwinds.
Shares of ROCK have rallied 48.5% in the past year against the Zacks Building Products - Miscellaneous industry’s growth of 12%. Earnings estimates for 2023 have moved north to $3.57 per share from $3.55 per share over the past 30 days. This depicts analysts' optimism over the company’s growth prospects. Solidifying this prospect, the company has a strong VGM Score of B, backed by Value and Growth Score of B.
Although this manufacturer and distributor of building products is facing supply chain headwinds and project delays along with inflation and seasonal fluctuations, the above-mentioned factors are encouraging.
Factors Favoring ROCK
Recently, Gibraltar reported first-quarter 2023 results, wherein its earnings and sales surpassed the Zacks Consensus Estimate by 12.9% and 1.4%, respectively. Also, the bottom line grew 16.7% year over year. The Zacks Consensus Estimate for the company’s 2023 EPS indicates growth of 5% from the previous year’s reported levels.
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Gibraltar is focused on its Three-Pillar Strategy — Business Systems, Portfolio Management and Organizational Development. The company continues to accelerate the implementation of three pillars through portfolio management initiatives, improvement of the business system and strengthening the organization. In first-quarter 2023, the company’s overall growth was attributed to material cost alignment, field operations efficiency, price management, business mix, 80/20 initiatives and the share repurchase program.
ROCK’s Infrastructure segment witnessed 8.7% growth in net sales to $18.7 million along with 38% increase in backlog year over year. Increased spending on infrastructure and continuous market participation efforts added to the upside. The company is optimistic about the future growth trends of this segment. The adjusted operating margin and adjusted EBITDA margin increased 800 basis points (bps) and 760 bps, year over year, respectively.
The solid potential of Renewables and Agtech segments is encouraging. In the first quarter of 2023, the backlog of the Residential segment increased 34% sequentially. The company expects the year-over-year backlog to be positive through 2023. Also, a strong project pipeline driven by produce and cannabis projects is expected to increase the backlog of the Agtech segment in the upcoming quarters. The company also expects revenue and margin growth in 2023 for these segments, considering improved supply chain management and insourcing initiatives.
Zacks Rank & Other Key Picks
ROCK currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Here are some other top-ranked stocks that investors may consider from the Zacks Construction sector.
Martin Marietta Materials, Inc. MLM currently sports a Zacks Rank #1. MLM delivered a trailing four-quarter earnings surprise of 31%, on average. Shares of the company have gained 14% in the past six months.
The Zacks Consensus Estimate for MLM’s 2023 sales and EPS indicates growth of 18% and 31.2%, respectively, from the previous year’s reported levels.
Vulcan Materials Company VMC currently carries a Zacks Rank #1. VMC has a trailing four-quarter earnings surprise of 7.1%, on average. Shares of the company have gained 10% in the past six months.
The Zacks Consensus Estimate for VMC’s 2023 sales and EPS indicates growth of 5.7% and 25.2%, respectively, from the previous year’s reported levels.
Watsco, Inc. WSO currently sports a Zacks Rank #1. WSO delivered a trailing four-quarter earnings surprise of 5.3%, on average. Shares of the company have gained 23.2% in the past six months.
The Zacks Consensus Estimate for WSO’s 2023 sales and EPS indicates growth of 3.1% and 2.1%, respectively, from the previous year’s reported levels.
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