Granite Construction: IIJA Ending And Margin Peaking Could Result In Downside
Granite Construction is facing potential downturns as demand driven by the IIJA peaks and funding is set to expire in September 2026. Analysts predict a reversal in revenue and margin growth after fiscal year 2027 due to declining backlog and fading tailwinds. The company's recent mergers and acquisitions may lead to overvaluation as earnings normalize with slowing demand.
- ▪Granite Construction is rated a sell due to peaking IIJA-driven demand and looming funding expiration in September 2026.
- ▪Revenue and margin growth are expected to reverse post-FY27 as IIJA tailwinds fade and backlog declines.
- ▪GVA's recent M&A activity near the cycle peak risks overpaying for targets with earnings likely to normalize lower as demand slows.
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