Results were hurt by a subdued performance in the Utility Support Structures and Engineered Support Structures segments, caused by a weak commercial and residential construction market. Soft demand for wireless communication structures as well as poor federal spending on infrastructure led to lower revenues.
We do not expect any significant momentum in Valmont's major businesses until a new highway bill is passed. Our long-term Underperform recommendation on the stock indicates that it would perform below the market. Our $63.00 target price, based on 15.4x 2010 EPS, reflects this view.
VALMONT INDS (VMI): Free Stock Analysis Report
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