RBC Capital analyst Anthony Codling downgraded Knife River Corp. (NYSE: KNF) from Outperform to Sector Perform with a price target of $58.00 (from $103.00).

The analyst comments: “Input cost inflation is a headwind for the US heavyside sector in general, and for KNF input costs may impact contract volumes towards the end of the construction season. We don't agree with all the views of the activist investor Starboard, but we do believe it may weigh on the performance of the shares. Taking all these things into consideration we are reducing our PT from $103 to $58 and moving our rating to Sector Perform (from Outperform).

As noted in Knife River's September 2026 presentation, headwinds experienced in Q2 have continued into the second half: i) fewer public bid lettings have driven increased competition, ii) fewer higher-margin, late-season bidding opportunities, iii) delays to major projects (Highway 6 and 190 in Texas progressing slower than expected, and work on the Hawaii P-209 pushed into 2027), iv) diesel prices have increased materially. As a result, H2'26 contracting services margin is expected to be between 9-10%.”

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Shares of Knife River Corp. closed at $52.27 yesterday.