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Analyst Research Report Snapshot


Griffin Securities Updates Coverage on Granite (GVA)




Griffin Securities, Inc.


03 Aug 2012





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We are updating coverage on Granite Construction, Inc. (NYSE: GVA) with a BUY rating and maintain our price target of $35.00 for GVA shares for the following reasons:  2Q ‘12 results were materially below expectations as EPS of $0.05 compared with our estimate and consensus estimate of $0.33- shortfall relates to (small) construction projects and the competitive bidding environment- additionally complete write-downs related to 2 projects were incurred in quarter ;  Backlogs declined sequentially to $1.95 billion versus $2.083 billion, or 6%- expect trends to materially improve into 2H 2012 as company is bidding on plethora of both large and small construction projects;  We are reducing 2012 EPS estimate to $1.28 vs. $1.70 due to $0.28 shortfall in 2Q and $0.14 net reduction for the remaining 2 quarters;  New Highway Bill (SAFETEA-LU) has been approved – 2 year bill - funding is unchanged vs. previous rate (annualized monthly)- believe infrastructure spending is back on front burner- states finally have visibility and will re-engage deferred projects, and;  Stock cheap on historical valuation basis.

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