Eagle Materials (EXP) Joins Terra to Produce Low-Carbon SCM
Eagle Materials Inc. EXP has entered into exclusive agreements with Terra CO2 for the prospective deployment of several eco-friendly, low-carbon cementitious commercial-scale plants. The expected deployments are likely to offer services in three geographic areas, including the Greater Denver market.
Per the agreements, Eagle Materials will have the rights to build and operate plants producing supplementary cementitious material (“SCM”). Following the entire development and full scaling, each plant will have the capacity to produce about 240,000 tons of SCM, annually. These strategic transactions will take the construction industry a step forward in meeting environmental goals.
The company shares optimistic views on entering into these exclusive agreements with Terra, as it believes this move will help cater to the growing demand for cement while ensuring sustainable production.
Eagle Materials’ Primary Growth Drivers
Eagle Materials is benefiting from the solid demand for public and private non-residential construction. Given the company’s nature of business, an increase in infrastructure spending directly elevates the demand for cement and aggregates. The business is divided into two sectors, Heavy Materials and Light Materials, which distinctively add to its growth trend.
During the second quarter of fiscal 2024, the Heavy Materials sector benefited from an increase in public highway and infrastructure awards within its geographical footprint. Also, manufacturing construction projects of semiconductors, EV batteries, clean energy and heavy industrial projects add to the growth trend. On the other hand, the Light Materials sector gained momentum primarily due to the solid backlog levels of houses under construction.
The company is expected to reap benefits in the upcoming period from solid non-residential construction activities and incremental federal funding from the enacted Infrastructure Investment and Jobs Act. Also, resilient pricing, given the growth in all its product lines, is expected to support its growth trend.
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Owing to the notable tailwinds, shares of EXP have gained 36.4% in the past year, outperforming the Zacks Building Products - Concrete and Aggregates industry’s 31.1% growth.
Zacks Rank & Key Picks
Eagle Materials currently carries a Zacks Rank #3 (Hold).
Here are some better-ranked stocks from the Construction sector.
EMCOR Group, Inc. EME presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
It has a trailing four-quarter earnings surprise of 25%, on average. Shares of EME have increased 41.8% in the past year. The Zacks Consensus Estimate for EME’s 2023 sales and earnings per share (EPS) indicates an improvement of 12% and 52.8%, respectively, from the prior-year levels.
M-tron Industries, Inc. MPTI currently sports a Zacks Rank of 1. MPTI delivered a trailing four-quarter earnings surprise of 35.6%, on average. It has surged 273.3% in the past year.
The Zacks Consensus Estimate for MPTI’s 2023 sales and EPS indicates growth of 30.6% and 156.7%, respectively, from the previous year.
Willdan Group, Inc. WLDN currently sports a Zacks Rank of 1. WLDN delivered a trailing four-quarter earnings surprise of a whopping 850.6%, on average. The stock has gained 37.6% in the past year.
The Zacks Consensus Estimate for WLDN’s 2023 sales and EPS indicates growth of 14.1% and 47.7%, respectively, from a year ago.
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