We are reaffirming our Outperform recommendation on Valmont Industries (VMI). Fourth quarter earnings of $1.83 per share outpaced the Zacks Consensus Estimate. Revenues increased by double digits, led by significant growth in the Irrigation Segment.
Valmont is witnessing significant strength in the irrigation market and an improving demand for utility transmission structure. Going forward, management envisions a continued strong performance in 2012. The outlook for irrigation equipment is healthy while demand for Utility Support Structures is expected to rise.
Our long-term Outperform recommendation on the stock indicates that it would exceed the broader market. Our price target of $138 is based on 18.3x our fiscal 2012 earnings estimate.
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