Markets

Granite Construction Down to Strong Sell on Weak Earnings

Zacks Investment Research downgraded Granite Construction IncorporatedGVA to a Zacks Rank #5 (Strong Sell) on Sep 30, 2015. Going by the Zacks model, companies holding a Zacks Rank #5 have strong chances of underperforming the broader market in the near term.

Why the Downgrade?

Shares of Granite Construction dipped to a 52-week low of $29.32 on Sep 29, before closing a notch higher at $29.69. The company's share price has been declining since it reported second-quarter results on Jul 30.

Granite Construction's earnings per share declined 31% year over year to 24 cents. The bottom line also missed the Zacks Consensus Estimate of 42 cents by a wide margin of 43%. Net sales decreased 2.8% year over year to $569 million and also fell short of the Zacks Consensus Estimate of $624 million.

For 2015, Granite Construction expects consolidated revenue growth in the mid-single digits and consolidated EBITDA margin of 6% to 8%.

Further, Granite Construction's estimates have undergone negative revisions over the past 60 days. The Zacks Consensus Estimate for the stock has decreased 8% to $1.56 per share for 2015 and 7% to $2.16 per share for 2016. Considering the weak results and outlook investors are dubious on Granite Construction's growth prospects.

Stocks to Consider

Some better-ranked stocks in the sector include China Railway Construction Corporation Limited CWYCY , China Railway Group Limited CRWOY and Dycom Industries Inc. DY . All these stocks sport a Zacks Rank #1 (Strong Buy).

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CHINA RAILWY CP (CWYCY): Free Stock Analysis Report

GRANITE CONSTRU (GVA): Free Stock Analysis Report

DYCOM INDS (DY): Free Stock Analysis Report

CHINA RAILWY GP (CRWOY): Free Stock Analysis Report

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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