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Granite (GVA) Boosts Backlog With $27M Project by Caltrans

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Granite Construction Incorporated (GVA - Free Report) has been selected by the California Department of Transportation (Caltrans) to widen shoulders and resurface the State Route 33 (SR33) in Kern County, CA.

This SR33 enhancement project of approximately $27 million, which will be funded by Caltrans, will be included in Granite’s second-quarter 2024 Committed and Awarded Projects (CAP).

Project Scope in Details

Per the contract, Granite will be responsible for enhancing road safety and driving conditions of this 19-mile stretching SR33. The responsibilities comprise widening the existing two-lane road by adding five-foot shoulders on both sides, repairing localized asphalt and overlaying the Hot Mix Asphalt (‘HMA”) for the entire project length.

Additional scope of the project includes removing and replacing 19 drainage systems, and constructing two new box culverts, five new headwalls, and about 800 linear feet of new storm drain pipe.

Moreover, this project will require 115,160 tons of HMA, which will be supplied by Granite’s Solari Sand and Gravel facility in Kern County.

This contract is anticipated to start in November 2024 and end in January 2026.

CAP – Growth Driver of Granite

Granite is focusing on growing a high-quality CAP portfolio on the back of a positive public funding environment and resilient private market. During the first quarter of 2024, total CAP reached a balance of $5.5 billion, up 7.7% year over year. The uptrend was driven by solid public and private work environments across its geographies. Also, the range of opportunities that came through with the Federal Infrastructure Bill added to the growth momentum.

Furthermore, the best-value projects remain Granite’s focus and as of Mar 31, 2024, the projects represented $2.5 billion, or 46%, of the company’s total CAP.

Under the Construction segment, CAP in California group was $2.4 billion, up 26% year over year. Given various market opportunities and healthy state funding levels, the company is seeking significant bid opportunities to grow its CAP value in 2024.

Zacks Investment Research
Image Source: Zacks Investment Research

Shares of this civil construction company and aggregate producer gained 21% in the past three months, outperforming the Zacks Building Products - Heavy Construction industry’s 18.1% growth. The company’s focus on operational excellence and strategic decision-making across its construction and materials segments are likely to continue fostering growth in the upcoming period.

Zacks Rank & Key Picks

Granite currently carries a Zacks Rank #3 (Hold).

Here are some better-ranked stocks from the Construction sector.

Advanced Drainage Systems, Inc. (WMS - Free Report) currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

WMS delivered a trailing four-quarter earnings surprise of 30.5%, on average. The stock has risen 39.5% in the past year. The Zacks Consensus Estimate for WMS’ fiscal 2025 sales and earnings per share (EPS) indicates growth of 5.1% and 12.2%, respectively, from the prior-year reported levels.

Arcosa, Inc. (ACA - Free Report) currently sports a Zacks Rank of 1. It has a trailing four-quarter earnings surprise of 43.9%, on average. Shares of ACA have increased 16% in the past year.

The consensus estimate for ACA’s 2024 sales and EPS implies increases of 15.2% and 10.8%, respectively, from the prior-year reported levels.

Fluor Corporation (FLR - Free Report) presently sports a Zacks Rank of 1. FLR delivered a trailing four-quarter earnings surprise of 51.3%, on average. The stock has gained 56.4% in the past year.

The Zacks Consensus Estimate for FLR’s 2024 sales and EPS indicates increases of 13.5% and 6.2%, respectively, from a year ago.

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