We are maintaining our Outperform recommendation on
Valmont Industries, Inc.
) following its strong second-quarter 2012 results. Revenues and
earnings topped Zacks Consensus Estimates. Profit jumped 31% year
over year on healthy revenue growth, boosted by a solid performance
in the company's Utility Support Structures division.
Valmont is witnessing significant strength in the irrigation market
and improving demand for its utility transmission structure. The
company expects to post double-digit earnings growth in 2012
despite the European slowdown. The outlook for irrigation equipment
is strong while demand for Utility Support Structures is expected
Healthy order activity and a growing backlog support expectations
for a strong 2012. Our long-term Outperform recommendation
indicates that it would exceed the broader market. Our price target
of $153 is based on 18.3x our fiscal 2012 earnings estimate.
VALMONT INDS (VMI): Free Stock Analysis Report
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