Jefferies Increases Its PT on Vulcan Materials to $52 (VMC)

Jefferies is out with its report today on Vulcan Materials VMC, raising its price target from $47 to $52. In a note to clients, Jefferies writes, "Rolling our estimate of mid-cycle profitability to what it would be if it occurred in 2011, rather than in 2010, increases our price target to $52/share from $47. As the latter is 25% above the current share price, we maintain a Buy rating on the shares. Our 12-month price target of $52/share is based on our estimate of Vulcan's mid-cycle EBITDA of $1,117m, multiplied by our estimate of its future long-term EV/EBITDA ratio of 8.5. The main risks, in our view, are that real price increases may be difficult to sustain and volumes may recover at a different rate than we have assumed." At the time of posting, shares of VMC were trading at $43.61, up 2.47% from Monday's close.