Granite Construction upgraded to "buy"

07/30/07 - Davenport & Co.

NEW YORK, July 30 (newratings.com) - Analysts at Davenport & Company upgrade Granite Construction Inc (GVA) from "neutral" to "buy," while raising their estimates for the company. The 12-month target price is set to $80.

In a research note published on July 27, the analysts mention that the company has reported its 2Q07 EPS significantly ahead of the estimates and the consensus. Granite Construction’s HCD division posted $17.4 million in gross profits in the quarter, as compared to the expected losses of $1.3 million. HCD is likely to break even this year and its performance is expected to improve in 2008 and 2009, the analysts say. The Branches business is likely to benefit from the robust construction conditions, after facing some revenue challenges in the near term, Davenport & Company adds. The EPS estimates for 2007 and 2008 have been raised from $3.05 to $3.40 and from $3.75 to $4.12, respectively.