Peet Serfontein & Khumbulani Kunene
We enter a long position with a target price of $314 and a stop-loss of $250.
Vulcan Materials is one of the largest construction materials producers in the United States (US), primarily supplying crushed stone, sand as well as gravel and asphalt for infrastructure, commercial and residential construction projects. Vulcan distributes these aggregates from more than 420 active aggregate facilities, ~70 asphalt facilities, and ~75 concrete facilities.
The company plays a significant role in the American building and infrastructure sector, benefitting from long-term demand linked to road construction, urban development and government infrastructure spending initiatives.
Technically, the combination of supportive long-term trend dynamics, improving momentum conditions and favourable mean-reversion characteristics presents an attractive buying opportunity for the stock (see the black trendline on the main chart).
The price near the lower range of an upward sloping linear regression channel pattern also supports a bullish bias for the stock (see the larger insert on the main chart). This pattern highlights that the broader long-term trend remains upward sloping, reflecting sustained positive price progression over time.
Fading downside price momentum according to the Moving Average Convergence Divergence (MACD) histogram, and the recent upward trajectory of the on-balance volume (OBV) indicator, also supports our bullish view.
| Share Information | |
|---|---|
| Share Code | VMC US |
| Industry | Materials |
| Market Capital (USD) | 34.9 billion |
| One Year Total Return | 0.27% |
| Return Year-to-Date | -5.34% |
| Current Price (USD) | 268.94 |
| 52 Week High (USD) | 331.09 |
| 52 Week Low (USD) | 252.35 |
| Financial Year End | December |
| While the price is below its 200-day simple moving average (SMA), the recent stabilisation near the lower range of the linear regression channel may still provide selective bullish support. As such, the trade idea is regarded as a counter-trend strategy. | |
| Consensus Expectations (Bloomberg) | ||||
|---|---|---|---|---|
| FY25 | FY26E | FY27E | FY28E | |
| Headline Earnings per Share (USD) | 8.00 | 9.27 | 10.89 | 12.69 |
| Growth (%) | 15.83 | 17.55 | 16.52 | |
| Dividend Per Share (USD) | 1.96 | 2.14 | 2.31 | 2.40 |
| Growth (%) | 9.08 | 7.95 | 3.81 | |
| Forward PE (times) | 21.11 | 23.15 | 21.19 | |
| Forward Dividend Yield (%) | 0.79 | 0.86 | 0.89 | |
| The company is set to deliver consistent double-digit earnings growth over the medium term, supported by a positive outlook from the group amid continued strength in public construction activity, improving private non-residential opportunities and a generally healthy pricing environment. | ||||
Buy/Sell Rationale:
Technical Analysis:
Fundamental view:
| Share Name and Position | AXP - Buy (Continue to hold) |
MSFT - Buy (Continue to hold) |
CVX - Buy (Continue to hold) |
ORLY - Buy (Continue to hold) |
|---|---|---|---|---|
| Entry | 307.03 | 417.42 | 192.64 | 93.92 |
| Current Price | 310.72 | 416.03 | 184.71 | 89.87 |
| Movement | +1.2% | -0.3% | -4.1% | -4.3% |
| Comment | The stock is testing the lower range of an upward-sloping channel pattern, remaining of technical interest. Remains below its 200-day SMA, fading downside momentum is supportive. Our profit target is $352.00, with a trailing stop at $301.00. | The current location of the volume-at-price profile remains of interest. Remains below its 200-day SMA. Upside momentum supports the trade strategy. Our profit target is $480.00 with a trailing stop-loss at $403.00 | The price in a developing Elliott wave theory price remains of interest. Remains above its 200-day SMA. Fading downside momentum is supportive. Our profit target is $220.00 with a trailing stop-loss at $181.00. | A price in a developing falling wedge pattern remains of interest. Remains below its 200-day SMA and the trade is regarded as a counter-trend strategy. The start of downside momentum is a concern to the trade strategy. Our profit target is $109.00 with a trailing stop-loss at $89.00. |
| Time to exit | 8 July 2026 | 12 August 2026 | 15 July 2026 | 2 July 2026 |
FNB Stockbroking and Portfolio Management (Pty) Ltd, a subsidiary of FirstRand Bank Limited, an authorised Financial Services Provider and authorised user of the JSE limited (Reg no: 1996/011732/07). This Publication note is issued by FNB Stockbroking and Portfolio Management (Pty) Ltd for the information of clients only and should not be produced in whole or part without prior permission. Although FNB Stockbroking and Portfolio Management (Pty) Ltd is an Authorised Financial Services Provider, any opinions and/or analysis contained in this Publication are for informational purposes only and should not be considered advice, including but not limited to financial, legal or tax advice, or a recommendation to invest in any security or to adopt any investment strategy. The information contained herein has been obtained from sources/persons which we believe to be reliable but is not guaranteed for correctness, completeness or otherwise and we do not assume liability for loss arising from errors in the information or that may be suffered from using or relying on the information contained herein irrespective of whether there has been any negligence by us, our affiliates or any other employees of us, and whether such losses be direct or consequential. As market and economic conditions are subject to rapid change, any comments, opinions, and analysis is rendered as of the date of publishing and may change without notice. Such changes may have a material impact on the outcome of any investment. Securities involve a degree of risk and are volatile instruments. Past performance is not indicative of future performances. Securities or financial instruments mentioned in the Publication note may not be suitable for all investors and FNB Stockbroking and Portfolio Management (Pty) Ltd has bares no responsibility whatsoever arising from or as a consequence hereof. The material is not intended as a complete analysis of every material fact regarding any share, instrument, sector, region, market, country, investment, or strategy. The recipient of this Publication must make their own investment decision and is advised to contact his relationship manager for a personal financial analysis prior to making any investment decisions. Copyright 2018 by FNB Stockbroking and Portfolio Management (Pty) Ltd.
