Berenberg initiates coverage on Arcosa; sees scope for strong earnings growth
05/10/2021 13:18
** Berenberg starts coverage on infrastructure-related
products manufacturer ACA.N with "buy" rating and PT of $63,
implying an upside of 26.5% to last close
** Brokerage says shares are down 9% YTD, as elevated steel
costs continue to suppress barge demand and amid lingering
uncertainty around wind tower demand
** Brokerage, however, believes these risks are largely been
priced into ACA's shares and thus sees plenty of scope for
strong earnings growth
** Says ACA is uniquely positioned to benefit both from
"hard" infrastructure (roads/bridges) and renewable energy/5G
investment
** Brokerage expects a sharp rebound in earnings beyond
2021, led by accelerating aggregates pricing trends and a strong
recovery in barge demand
** Believes tighter supply/demand dynamics in Texas, co's
high-growth market, should enable high-single-digit pricing
gains
** Avg rating among 6 analysts covering the stock is "buy";
Median PT is $66 - Refinitiv Eikon data
(Reporting by Aniruddha Chakrabarty)
((aniruddha.c.thomsonreuters.com@reuters.net))