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Granite (GVA) Wins $38M CMGC Contract for Highway 101 Expansion

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Granite Construction Incorporated (GVA - Free Report) secured a $38-million contract from the California Department of Transportation (Caltrans) for the Highway 101 mainline segment. This contract involves adding peak-hour High Occupancy Vehicle (HOV) lanes and reconstructing the highway in southern Santa Barbara. The project, funded by Caltrans and local sources, was included in GVA’s second-quarter Committed and Awarded Projects (CAP).

The latest Highway 101 mainline segment marks Granite's sixth project under its Construction Manager/General Contractor (CMGC) contract. Granite, Caltrans and the Santa Barbara County Association of Governments (SBCAG) have collaborated for over five years under this contract to enhance Highway 101.

Mainline segments in Carpinteria and Summerland are complete, while the segment south of Summerland is expected to finish by the end of this year. Ongoing segments in Montecito are scheduled for completion in 2026. Segment 4E South will integrate with the Montecito segments to improve efficiency. The segment is scheduled to commence in September 2024 and is expected to be completed by October 2026.

The project aims at relieving traffic congestion through this critical corridor while emphasizing sustainability. Materials removed from existing facilities are recycled into 13,000 tons of aggregate base. Concrete for paving, totaling 11,800 cubic yards, is produced from an onsite batch plant, with materials sourced from Granite’s nearby facilities, amounting to 19,000 tons. Hot Mix Asphalt (HMA), totaling 12,850 tons, will be supplied from Granite’s Gardner and Santa Paula Hot Plants.

CAP – Growth Driver of Granite

GVA is focused on growing a high-quality CAP portfolio on the back of a positive public funding environment and resilient private market. During second-quarter 2024, total CAP reached a balance of $5.6 billion, up 2.5% year over year. The uptrend was driven by solid public and private work environments across its geographies.

The best-value projects remain Granite’s focus and as of Jun 30, 2024, the projects represented $2.3 billion or 42% of the company’s total CAP.

Under the Construction segment, CAP in California group was $2.3 billion, up $2 million year over year. Given various market opportunities and healthy state funding levels, the company is seeking significant bid opportunities to boost its CAP value in 2024.

Zacks Investment Research
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Shares of GVA soared 46.2% in the past six months compared with the Zacks Building Products - Heavy Construction industry’s 38.9% growth. Earnings estimates for 2024 have moved up to $5.24 from $4.76 in the past 30 days, indicating 66.9% year-over-year growth.

The consistent award wins have been driving GVA’s performance. The company is focused on growing a high-quality CAP portfolio on the back of a positive public funding environment and resilient private market.

Zacks Rank & Other Key Picks

Granite currently carries a Zacks Rank #2 (Buy).

Here are some other top-ranked stocks from the Construction sector.

EMCOR Group, Inc. (EME - Free Report) presently flaunts a Zacks Rank #1 (Strong Buy). It has a trailing four-quarter earnings surprise of 36.5%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.

The consensus estimate for EME’s 2024 earnings per share (EPS) indicates an improvement of 34.9% from the prior-year levels.

Dycom Industries Inc. (DY - Free Report) currently carries a Zacks Rank #2. It has a trailing four-quarter earnings surprise of 27.9%, on average.

The consensus estimate for DY’s fiscal 2025 sales and EPS indicates growth of 11% and 8.8%, respectively, from the prior-year reported levels.

Advanced Drainage Systems, Inc. (WMS - Free Report) currently sports a Zacks Rank #2. WMS delivered a trailing four-quarter earnings surprise of 23.2%, on average.

The Zacks Consensus Estimate for WMS’ fiscal 2025 sales and EPS indicates growth of 4.7% and 12.4%, respectively, from the prior-year reported levels.

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