UPDATE: JPMorgan Downgrades Eagle Materials (EXP) to Neutral

JPMorgan analyst Adrian Heurta downgraded Eagle Materials (NYSE: EXP) from Overweight to Neutral with a price target of $130.00 (from $165.00).

The analyst comments "We are decreasing our 22/23 top line expectations by 1/4% as we expect lower volumes on gypsum wallboard and cement coming from the deterioration of the residential sector (50% of revs). Thus, our 22/23 EBITDA estimates are also lower by 4/7% with margins decreasing 1pp in both years on the back of higher energy costs. We have EBITDA for this year at $735mn or +10% y/y with volumes growing low-SD across all product lines with the exception of aggregates where we expect to see a small 1% decline. We expect to see strong pricing across the board both this and next year, with aggregates prices rising +11% this year (+5% in 23), cement +6% (+6% in 23) and wallboard +16% (+2% in 23). CapEx is usually $80-100mn per year but could be $25-30mn higher for 23/24 on the back of PLC cement investments."

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 $120.25 yesterday.

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