Granite Construction Falls Far Short of Jefferies Estimate (GVA)

Granite Construction GVA posted a 2Q loss of ($0.18), far short of consensus of $0.08 and Jefferies' estimate of $0.35. Jefferies lowered its price target by $5, from $31 to $26 on this news. The analysts said, "Granite Construction historically trades at a discount to the E&C group based on P/E multiples. Given the company's civil construction focus, California exposure, and difficult large projects execution history, we believe the discount is warranted. Our $26 price target on Granite reflects a 15.5x multiple on our 2011 EPS estimate of $1.50 plus $3 per share in detachable cash, within historical ranges." Shares of GVA are currently trading at $24.01.