D.A. Davidson Believes SUM Won’t Stop Here

By Ryan Adsit

D.A. Davidson analyst Brent Thielman reiterated a Buy rating on Summit Materials (NYSE: SUM) yesterday and set a price target of $27. The company’s shares opened today at $24, close to its 52-week high of $24.81.

Thielman commented:

“We attended Summit Materials’ first investor day in Houston, TX. Executives and other management team leaders participated in a thorough discussion of Summit’s disciplined acquisition and integration strategy, end-market prospects (including status of the broader construction cycle), pricing opportunities across the platform, and longer-term financial targets. In our view the event was an effective showcase of Summit’s differentiated model relative to public peers, including its success in operating sizable downstream (concrete/asphalt) products businesses, an acquisition strategy that maintains a local mindset with scalable positions, and capability to sustain recent years of successful growth.”

According to TipRanks.com, Thielman is a 3-star analyst with an average return of 2.0% and a 54.0% success rate. Thielman covers the Industrial Goods sector, focusing on stocks such as Martin Marietta Materials, Mueller Water Products, and Eagle Materials Inc.

Currently, the analyst consensus on Summit Materials is Moderate Buy and the average price target is $29, representing a 20.8% upside.

In a report released yesterday, RBC Capital also reiterated a Buy rating on the stock with a $29 price target.

Summit Materials’ market cap is currently $1.81B and has a P/E ratio of 27.52. The company has a book value ratio of 2.3354.

Based on the recent corporate insider activity of 39 insiders, corporate insider sentiment is negative on the stock. Most recently, in September 2016, John Raymond Murphy, a Director at SUM bought 6,000 shares for a total of $113,580.

Summit Materials, Inc. operates as a construction materials company, which provides construction materials and related downstream products. It supplies aggregates, cement, ready-mix concrete and asphalt paving mix to the residential, nonresidential and public infrastructure markets. The company operates its business through the following segments: Central, West and East. The company was founded by Thomas W. Hill on September 23, 2014 and is headquartered in Denver, CO.