On Friday, Stifel analysts maintained a positive stance on Valmont Industries (NYSE:VMI), reiterating a Buy rating and a price target of $382.00. The stock, currently trading at $337.41, has shown remarkable momentum with an 11.17% gain over the past week. According to InvestingPro analysis, the company appears fairly valued based on its comprehensive Fair Value model.
The firm's latest proprietary irrigation survey indicates a modestly improved near-term outlook for the company into 2025, despite a slight downturn in recent dealer expectations.
The survey, which encompassed feedback from 46 Valley irrigation dealers, revealed a shift towards less pessimistic views compared to sentiments from three months prior. Dealers now project near-term (NTM) volume to decrease by 0.3% year-over-year (y/y), which is an improvement from the previously forecasted 1.4% decline. With a strong financial health score of 3.16 out of 5 on InvestingPro, Valmont maintains a solid position to navigate market fluctuations.
Valmont's fourth-quarter 2024 results showed domestic volume dropping by 2.5% y/y, with prices remaining virtually unchanged, experiencing a negligible decrease of 0.1%. These figures fell short of the dealers' expectations from three months earlier, which anticipated a 2.2% y/y reduction in volume.
Looking ahead, dealers have set their volume expectations for the next three and twelve months at -2.1% and -0.3% y/y, respectively. Notably, there is a unanimous consensus among the dealers, with 100% agreeing that no further price increases are expected, a sentiment that has remained consistent.
Stifel's report concluded with an outlook suggesting that Valley irrigation dealers are anticipating conditions to improve as the year 2025 progresses. The survey's findings offer a glimpse into the market's expectations for Valmont's performance in the near term. Notably, the company has maintained dividend payments for 46 consecutive years, demonstrating long-term financial stability.
In other recent news, Valmont Industries reported its third-quarter earnings with a revenue of $1.02 billion and a diluted EPS of $4.11. Despite a slight decrease of 2.9% in net sales to $1 billion, the company demonstrated resilience with a robust operating profit growth of $125.7 million. Analyst firms Stifel, CL King, and DA Davidson maintained a Buy rating on Valmont's stock. Stifel raised its price target to $360, citing strong margins in the Infrastructure segment, while CL King held its target at $335 and DA Davidson adjusted its price target from $340 to $380.
Valmont Industries also announced the appointment of Deborah Caplan to its Board of Directors. Caplan, a seasoned executive with a rich background in utility markets and talent development, is expected to contribute valuable insights to Valmont's strategic initiatives.
In other company news, despite the impact of Hurricanes Helene and Milton, Valmont managed to maintain steady growth, with storm sales in agriculture approximately double the historical average. The company's telecom sector is reportedly recovering with an 8% growth driven by 5G expansion, and progress is being made on an $85 million project in the EMEA region, particularly in Egypt.
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