Vulcan Earnings: Aggregate Volumes Remain Pressured, but Pricing Gains Provide Relief; Shares Pricey

Narrow-moat-rated Vulcan reported mixed second-quarter results as aggregate volumes remained pressured. Net sales fell almost 5% year over year, mainly due to the sale of some Texas concrete assets last year as Vulcan’s other two segments reported positive revenue growth in the quarter. Higher interest rates continue to constrain construction markets, but there are pockets of growth, such as data centers and single-family housing starts. While some near-term demand pressures will remain, ramping infrastructure spending and robust aggregate price growth should provide relief in the second half of the year. As such, we have increased our fair value estimate to $166 from $164 per share.