Granite & Kraemer JV Wins $113M Project in Michigan

Granite Construction Incorporated's GVA joint venture with Kraemer North America, GKJV-II, has been selected by the Michigan Department of Transportation ("MDOT") to remove and replace the Lafayette Bascule Bridge in Michigan.

This approximately $113 million project, is funded by the Federal Highway Administration and the MDOT. Per this contract, the joint venture is expected to demolish the existing structure, along with cofferdam installation, new substructure and bascule piers, structural steel, machinery, bridge house, and approach spans.

While the confirmation of the final timeline is pending, the project is expected to start in 2024 fall and be finished by 2027 summer. Granite will include the project value in its second-quarter 2024 Committed and Awarded Projects ("CAP").

CAP Solidifying Granite's Growth Prospects

Granite is focusing on growing a high-quality CAP portfolio on the back of a positive public funding environment and resilient private market. During the first quarter of 2024, total CAP reached a balance of $5.5 billion, up 7.7% year over year. The uptrend was driven by solid public and private work environments across its geographies. Also, the range of opportunities that came through with the Federal Infrastructure Bill adds to the growth momentum.

Furthermore, the best-value projects remain Granite's focus and as of Mar 31, 2024, it represented $2.5 billion or 46% of the company's total CAP.

Under the Construction segment, CAP in California group was $2.4 billion, up 26% year over year. Given various market opportunities and healthy state funding levels, the company is seeking significant bid opportunities to grow its CAP value in 2024.

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Shares of this civil construction company and aggregate producer gained 45.8% in the past year compared with the Zacks Building Products - Heavy Construction industry's 46% growth. The company's focus on operational excellence and strategic decision-making across its construction and materials segments will likely foster its growth in the upcoming period.

Zacks Rank & Key Picks

Granite currently carries a Zacks Rank #3 (Hold).

Here are some better-ranked stocks from the Construction sector.

Advanced Drainage Systems, Inc. WMS currently sports a Zacks Rank #1 (Strong Buy).

WMS delivered a trailing four-quarter earnings surprise of 30.5%, on average. The stock has risen 31.2% in the past year. The Zacks Consensus Estimate for WMS' fiscal 2025 sales and earnings per share indicates growth of 5.1% and 12.2%, respectively, from the prior-year reported levels.

Arcosa, Inc. ACA currently sports a Zacks Rank of 1. It has a trailing four-quarter earnings surprise of 43.9%, on average. Shares of ACA have gained 8% in the past year.

The consensus estimate for ACA's 2024 sales and EPS implies increases of 15.2% and 10.8%, respectively, from the prior-year reported levels.

Fluor Corporation FLR presently sports a Zacks Rank of 1. FLR delivered a trailing four-quarter earnings surprise of 51.3%, on average. The stock has risen 44.2% in the past year.

The Zacks Consensus Estimate for FLR's 2024 sales and EPS indicates increases of 14.3% and 5.5%, respectively, from a year ago.

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