Goldman Sachs Starts Eagle Materials (EXP) at Conviction Buy; Pure Housing Leverage

Goldman Sachs initiates coverage on Eagle Materials (NYSE: EXP) with a Conviction Buy and $65 price target, suggesting 26% upside.

While the stock is up sharply YTD, the firm's FY2014-2015 EPS estimates are 30-50% above consensus driven by (1) accelerating Wallboard pricing off the 2011-12 trough, (2) emerging Cement pricing recovery, and (3) value enhancing capital deployment opportunities in specialty cement and frac sand capex projects.

"We believe EXP can exceed prior cycle earnings at sharply lower construction volumes in 2014 due to Wallboard share gains (+40%), improved Paperboard productivity, and expanded Cement assets.

For an analyst ratings summary and ratings history on Eagle Materials click here. For more ratings news on Eagle Materials click here.

Shares of Eagle Materials closed at $51.57 yesterday.

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