Arcosa (NYSE:ACA) Downgraded by Texas Capital to "Hold"

Key Points

• Texas Capital downgraded Arcosa from strong-buy to hold, adding to a mixed analyst picture for the stock. Overall, the consensus rating now stands at Hold with a target price of $138.33.
• Arcosa recently beat earnings expectations, reporting $0.51 EPS versus the $0.13 estimate, though revenue of $571.7 million came in below expectations. Revenue still grew 5% year over year.
• CRH agreed to acquire Arcosa for $150 per share in cash, which has pushed shares higher and may set a near-term floor under the stock. The announcement has also drawn investor attention and sparked some shareholder-law-firm investigations into the deal price.

Arcosa (NYSE:ACA - Get Free Report) was downgraded by analysts at Texas Capital from a "strong-buy" rating to a "hold" rating in a report released on Tuesday,Zacks.com reports.

Several other brokerages also recently commented on ACA. Zacks Research downgraded Arcosa from a "hold" rating to a "strong sell" rating in a report on Tuesday, April 28th. Wall Street Zen raised Arcosa from a "sell" rating to a "hold" rating in a research note on Saturday, May 30th. Weiss Ratings downgraded Arcosa from a "buy (b-)" rating to a "hold (c+)" rating in a report on Monday, May 11th. DA Davidson boosted their price objective on Arcosa from $120.00 to $125.00 and gave the stock a "buy" rating in a report on Monday, March 2nd. Finally, Barclays upped their price objective on shares of Arcosa from $115.00 to $140.00 and gave the company an "overweight" rating in a research note on Monday, May 4th. Three analysts have rated the stock with a Buy rating and four have given a Hold rating to the company's stock. According to MarketBeat.com, the stock has an average rating of "Hold" and a consensus target price of $138.33.

Arcosa Price Performance

NYSE ACA opened at $144.99 on Tuesday. The stock has a market capitalization of $7.12 billion, a P/E ratio of 32.01, a P/E/G ratio of 2.13 and a beta of 1.06. Arcosa has a 1 year low of $81.91 and a 1 year high of $146.92. The business's fifty day moving average is $124.49 and its two-hundred day moving average is $116.70. The company has a debt-to-equity ratio of 0.57, a quick ratio of 1.60 and a current ratio of 2.32.

Arcosa (NYSE:ACA - Get Free Report) last released its quarterly earnings data on Thursday, April 30th. The company reported $0.51 earnings per share for the quarter, topping the consensus estimate of $0.13 by $0.38. The business had revenue of $571.70 million during the quarter, compared to analyst estimates of $642.40 million. Arcosa had a return on equity of 8.52% and a net margin of 7.88%.The company's revenue was up 5.0% compared to the same quarter last year. During the same period last year, the company posted $0.49 EPS. On average, research analysts forecast that Arcosa will post 4.25 earnings per share for the current fiscal year.

Institutional Investors Weigh In On Arcosa

A number of hedge funds and other institutional investors have recently added to or reduced their stakes in ACA. AQR Capital Management LLC boosted its position in Arcosa by 20.6% during the first quarter. AQR Capital Management LLC now owns 8,326 shares of the company's stock valued at $642,000 after purchasing an additional 1,423 shares during the last quarter. United Services Automobile Association bought a new stake in shares of Arcosa in the 1st quarter valued at approximately $256,000. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC grew its stake in shares of Arcosa by 11.5% in the 1st quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC now owns 143,244 shares of the company's stock valued at $11,047,000 after buying an additional 14,723 shares in the last quarter. Jane Street Group LLC increased its holdings in Arcosa by 193.8% in the first quarter. Jane Street Group LLC now owns 105,243 shares of the company's stock worth $8,116,000 after buying an additional 69,427 shares during the last quarter. Finally, American Century Companies Inc. increased its holdings in Arcosa by 1.4% in the second quarter. American Century Companies Inc. now owns 12,690 shares of the company's stock worth $1,100,000 after buying an additional 181 shares during the last quarter. Hedge funds and other institutional investors own 90.66% of the company's stock.

Key Arcosa News

Here are the key news stories impacting Arcosa this week:

• Positive Sentiment: CRH agreed to buy Arcosa, Inc. (ACA) for $150 per share in cash, giving shareholders a sizable premium and likely setting a near-term floor under the stock. CRH to Acquire Arcosa; Leading U.S. Provider of Aggregates and Critical Infrastructure Products for $8.5B
• Positive Sentiment: Market coverage highlighted Arcosa’s shares jumping on the takeover news, reflecting investor enthusiasm for the premium buyout price. Arcosa Stock Rises on $8.5 Billion Acquisition by CRH
• Positive Sentiment: The deal could benefit CRH by expanding its aggregates footprint and infrastructure exposure, which supports the strategic rationale for completing the transaction. Is CRH's $8.5 Billion Arcosa Acquisition a Game Changer?
• Neutral Sentiment: Several law firms announced investigations into whether Arcosa’s board secured a fair price for shareholders, which could create legal headlines but does not change the announced deal terms yet.
• Neutral Sentiment: One commentary noted the stock looks overvalued after the rally, suggesting upside may be capped near the deal price if no higher bid emerges.

About Arcosa

Arcosa, Inc NYSE: ACA is a Dallas‐based industrial company that was formed through the spin‐off of Trinity Industries' construction products business in 2018. Since its inception, Arcosa has focused on the manufacture and sale of critical infrastructure components, serving a diverse set of end markets including transportation, construction and energy.

The company's Construction Products segment produces a broad range of highway safety products, such as guardrail systems, sign supports and crash cushions, as well as aggregates and ready‐mix concrete.

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