SUM - Embedded Expectations Analysis - 2018 10 09
Summit Materials, Inc. (SUM:USA) currently trades below corporate averages relative to UAFRS-based (Uniform) Earnings with a 15.6x Uniform P/E, implying bearish expectations for the firm. Meanwhile, management has concerns about pricing, increased costs, and EBITDA guidanceSpecifically, management lack confidence in the sustainability of current diesel fuel spot prices, and may be concerned about continued headwinds from higher fuel costs. Moreover, they may lack confidence in their ability to raise selling prices, sustain delivery efficiency of cement and liquid asphalt, and to meet expected lettings for TXDOT. They may also be exaggerating the impact of headwinds from weather on their ready-mix concrete sales. Finally, they may lack confidence in their ability to find small and medium-sized bolt-on acquisition targets, and to meet expectations for EBITDA going forward
Summit Materials is a holding company. Through its subsidiaries, the company is a construction materials company. The company produces and sells aggregates, cement, ready-mix concrete, asphalt paving mix and concrete products and owns and operates quarries, sand and gravel pits, cement plants, cement distribution terminals, ready-mix concrete plants, asphalt plants and landfill sites. The company is engaged in paving and related services. The company has operations in various states across the United States and in British Columbia, Canada. The company operates a municipal waste landfill in its East segment, and has construction and demolition debris landfills and liquid asphalt terminal operations in its West and East segments.
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