DA Davidson Lowers Price Target on Texas Industries (TXI), Currently Trades at 48x 2012 EBITDA Estimate

DA Davidson is reiterating its Neutral rating on shares of Texas Industries (NYSE: TXI), but is lowering its price target from $42 to $34.

The firm reports that shares of TXI are currently trading at 48x and 24x its 2012 and 2013 EBITDA estimates, well above its usual multiple of 5x to 20x. The large multiple is slightly justified by the company's main position in Texas, which is experiencing growth in their economy, and as investors feel that the company is a possible takeover candidate.

An analyst at DA Davidson comments, "we still view relatively encouraging signs in Texas Industries end markets on a near-term basis. In particular, the company’s core markets of Texas and California have experienced a meaningful lift in highway-related contracting activity this year, based on our latest State Contract Lettings survey."

For more ratings news on Texas Industries click here and for the rating history of Texas Industries click here.

Shares of Texas Industries closed at $31.59 yesterday.

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