Valmont Industries, Inc. (NYSE:VMI) has found success by being present in areas with consistent and high demand that are resistant to economic swings.

Estimates Are Rising

Over the last two months, the Consensus Estimate for VMI’s second-quarter 2023 profits has climbed by roughly 1.3%.

History of Positive Earnings Surprises

Valmont has surpassed the Consensus Estimate in three of the last four quarters while missing in the fourth. It generated a trailing four-quarter average profit surprise of approximately 5.4%.

Potential for Healthy Growth

The Consensus Estimate for 2023 earnings is now $15.7, reflecting a 13.6% year-over-year increase. Furthermore, earnings are predicted to increase by 8.5% in 2024.

Price Efficiency

VMI has outperformed the industry in terms of price performance, rising 28.5% in the last year versus 9.9% in the industry.

Growth and Creation of Value

The company has proved its dedication to adding considerable value through product leadership, a flexible global footprint, and breakthrough technologies by selectively investing in niche areas. These strategic investments have laid the groundwork for the company’s future success.

VMI is capitalizing on opportunities created by the global energy transition and growing utility spending in the Infrastructure sector. The company’s growing solar sector anticipates increased demand once the Inflation Reduction Act is fully implemented. Furthermore, commencing in 2024, VMI anticipates benefiting from the Infrastructure Investment and Jobs Act in the transportation markets.

Valmont’s Agriculture division is benefiting from favorable worldwide market fundamentals as well as a strengthening Brazilian market. As agricultural exports and maize output have increased significantly, the company has proactively invested in additional plant capacity to satisfy expanding market demand and improve customer service levels. This sector’s solid project pipeline gives a clear path to future growth potential.

Despite temporary difficulties in North America due to shifting order patterns and difficult comparisons, Valmont anticipates a recovery to more normalized order flow in the second half of the year. The company remains devoted to strategic pricing, effective cost control, and margin protection.

Valmont has also announced a definitive agreement to buy HR Products, Australia’s top wholesale provider of irrigation parts. This strategic transaction broadens Valmont’s regional footprint and improves the company’s components’ presence in a critical agricultural market.

The acquisition is consistent with Valmont’s worldwide agriculture business strategy, which emphasizes aftermarket parts and services. Valmont can better service its customers and tap into the large market for replacing wearable irrigation parts by expanding its products. This acquisition allows the company to produce recurring, high-value revenue streams that will aid in mitigating cyclicality in the agriculture industry.

Valmont Industries is enthusiastic about its prospects due to its outstanding financial performance, strategic investments, and skilled navigation of market dynamics. The company will continue to execute growth objectives, preserve profitability, and create long-term value for shareholders.

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