EAGLE MATERIALS INC. (EXP): what the price requires

At today's price, EAGLE MATERIALS INC. (EXP) is priced for -3.1% growth. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.

Generated: 2026-07-14 · Exported: 2026-07-16 · Source: https://boothcheck.com/report/EXP

Headline

FieldValue
TickerEXP
CompanyEAGLE MATERIALS INC.
Current price$204.88/sh
CompositionCement 50% / Concrete and Aggregates 12% / Gypsum Wallboard 33% / Recycled Paperboard 5%

What The Price Requires (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

FieldValue
Inversion basiswhole-company
Implied growth-3.1%
Multiple paid10x operating income

Solve inputs: computed at a 9.5% cost of capital with 4% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~4.9pp.

How unusual the bet is: within-range

ReferenceValue
vs own history-0.80σ
cohort percentile (of 76 peers)17
implied end-window share0%

Valuation X-Ray

The price is supported by asset-based and relative-multiple and growth-DCF value, while earnings-power lands below the price. A value/asset-supported name, not a pure growth bet.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

FamilyMedian price/FVModelsReads
Asset1.19x4expensive
Earnings10.94x5expensive
Relative0.99x2justifies
Growth1.15x3expensive

Families that justify the price: Asset, Relative, Growth Families that call it expensive: Earnings

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 7.3%); the inversion above states its own rate.

Per-Model Detail (n=14)

ModelFamilyFVPrice/FVApplicableMethodology
DCF Perpetual GrowthGrowth$86.202.38xyesFCF base $0.2B, growth 2% (input: historical growth), terminal g 2.1%, WACC 7.3%, 5yr projection
DCF Exit MultipleGrowth$213.110.96xyesExit EV/EBITDA: 197.1x / 199.1x / 201.1x (bear / base = today's held flat / bull), 5yr
Relative ValuationRelative$243.180.84xyesP/E 18x (static sector reference · 2026-04), scenarios: 15.1x / 18.0x / 20.9x (bear / base = reference held flat / bull), EV/EBITDA 26.4x
Simple DDMGrowth——no—
Two-Stage DDMGrowth——no—
Simple Excess ReturnAsset$143.151.43xyesBV/sh $46.08, ROE (TTM) 28.7%, ke 9.3%
Two-Stage Excess ReturnAsset$258.450.79xyes5yr excess ROE then converge to ke=9.3%
Discounted Future Market CapGrowth$178.291.15xyesRev $2.3B, growth 2% (input: historical growth; tapered), Terminal P/S: 2.4x / 2.8x / 3.3x (bear / base = today's held flat / bull, cap 8x)
Growth-Adjusted P/ERelative——no—
Margin TrajectoryGrowth——no—
Earnings Power ValueEarnings$153.981.33xyesNormalized EBIT (5y avg op income, one-time charges added back) $0.51B × (1−21%) / WACC 7.3% → EPV (no growth)
Residual IncomeAsset$216.810.94xyesBV $46.08 + 5yr PV of (ROE (TTM) 28.7% − Kₑ 9.3%) × BV; BV grows 8.8%/yr
Graham NumberAsset$116.811.75xyes√(22.5 × EPS $13.16 × BVPS $46.08) — Graham's conservative floor
EV/EBITDA RelativeRelative$0.0120488.00xyesEBITDA $0.04B × sector EV/EBITDA 12.0x (excluded from median)
FCF YieldEarnings$18.7310.94xyesFCF $197.4M / Kₑ 9.3% — zero-growth perpetuity
SBC-Adj FCF YieldEarnings$11.5417.75xyesSBC-adj FCF $0.18B (FCF $0.20B − SBC $0.02B) capitalized at Kₑ
Ben Graham FormulaEarnings$11.0318.57xyesEPS $13.16 × (8.5 + 2×-4.5%) × (4.4 / 5.3%)
ROIC-Justified P/BAsset——no—
P/Sales SectorRelative$180.331.14xyesRevenue $2.31B × sector P/S 2.5x
PEG Fair ValueRelative——no—
Earnings YieldEarnings$142.271.44xyesEPS $13.16 / required return 9.3% (Rf 4.3% + ERP 5.0%)
Funds From Operations MultipleRelative——no—
Clinical Phase NPVGrowth——no—
MertonAsset——no—
V5 Mechanical———no—

Solvency

FieldValue
Net debt$1.5b
Net debt / NOPAT (after-tax)2.41x
Net debt / operating income (pre-tax)1.90x
Share count CAGR (buyback)-5.7%
Burning cashno

Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.

Bullet Takeaways

Bull Case

The balance sheet tells you how management views its own business, and Eagle's actions speak loudly. The company has shrunk its share count by roughly 5.7% a year, one of the more aggressive buyback paces in heavy materials, which is management spending real cash to retire stock rather than hoard it or chase empire-building acquisitions. It can afford to: net debt sits at a modest 1.9 times operating income, interest coverage runs near 17 times, and the business throws off a 33.8% operating margin and a 28.7% return on equity. A cyclical company that keeps leverage low and buys back stock heavily is signaling confidence that its cash generation is durable through the cycle, not just at the top of it.

The economics of heavy building materials are quietly excellent, which is what funds that confidence. Cement and aggregates are low-value, high-weight products, so freight cost makes each plant a regional near-monopoly within its shipping radius. Eagle adds optionality on top with rail distribution that lets it "service customers in markets on both the east and west coasts", shifting wallboard to wherever demand is strongest. Fiscal 2026 showed the heavy side working: heavy materials revenue rose 10%, cement sales volume grew 8%, and aggregate volume surged 70% to a record on recent acquisitions. Pricing power is intact, with cement increases implemented across most markets on April 1 and a wallboard increase announced for June 1.

The setup also has a structural tailwind the company points to: a chronic U.S. housing shortage. The filing notes the "chronic housing shortage caused by more than a decade of underproduction and exacerbated by 'rate lock-in'", which is the demand backdrop that should support building materials volumes once interest-rate pressure eases. Eagle is investing into that thesis, modernizing its Mountain Cement plant and building the Duke Wallboard facility, projects that lift fiscal 2027 capital spending to a peak before adding low-cost capacity. The bull case is a disciplined, high-return regional monopoly buying back its stock at a reasonable price while it invests for the next leg of housing demand.

Bear Case

The structural truth a holder of any building-materials company has to sit with is that the current earnings reflect a cycle, and cycles turn. Eagle's roughly 34% operating margin is excellent, but it is being earned in a construction environment that is already showing strain, and the methods that look at normalized earnings flag the gap. The earnings-power lens reads the price as expensive precisely because it capitalizes a through-cycle average rather than the peak, and a 33.8% margin is well above what a mid-cycle year would produce. The bear's version of "what hasn't happened yet" here is the downturn: the price implies only about 0.3% operating growth a year, which looks undemanding, but for a cyclical it means the market is assuming current profitability roughly holds, and current profitability is cycle-elevated.

The most recent year already shows the cracks beneath the record headline. While heavy materials grew, the light materials sector, gypsum wallboard and paperboard, saw revenue fall 9% to $881.4 million on lower wallboard volume and prices, and annual earnings per share actually declined 4% to $13.16. Wallboard tracks new residential construction closely, and its weakness is the early read on the housing slowdown the filing itself acknowledges, that higher interest rates have "negatively affected the construction industry by, among other things, increasing material costs and decreasi"ng demand. A company whose light-materials half is already declining is not at a uniform peak; part of it is rolling over.

The investment cycle adds timing risk on top of the demand cycle. Fiscal 2027 capital spending peaks at $490 to $525 million for the Mountain Cement and Duke Wallboard projects, which is a large outlay landing before the new capacity earns anything, and it lands while wallboard demand is soft. If construction weakens further before the projects complete in late 2026 and 2027, Eagle would be commissioning new capacity into a down market, the classic cyclical mistiming. Leverage is modest, so this is not a solvency bear; it is a valuation-and-timing bear. The market is paying a price supported by current margins, in a business where the most reliable feature of margins is that they mean-revert.

Valuation

The price looks inexpensive on the surface and the surface needs a cyclical translation. At roughly 11 times company-wide operating income, the inversion implies only about 0.3% operating growth a year, which reads as a low bar. For a building-materials company, though, the relevant question is what operating income the multiple is being applied to, and the answer is a cycle-elevated one: a 33.8% operating margin is near the top of what this business earns. Capitalize a peak margin at a low multiple and the apparent cheapness shrinks toward fair.

The methods split along exactly that fault line. The relative-multiple and forward-growth families support the price, while the earnings-power lens, which normalizes to a five-year average operating income, reads it as expensive. That is the cyclical signature: against trailing peak earnings the stock looks reasonable, against normalized earnings it looks full. The asset-based methods land closer to the price, reflecting a strong return on equity, but they too credit a return earned in good times. Against a building-materials peer set that includes CRH and James Hardie, Eagle's multiple is not an outlier; the valuation question is less about peer position than about where in the cycle the earnings sit.

Solvency is a genuine strength and keeps this a valuation debate rather than a survival one. Net debt at 1.9 times operating income, interest coverage near 17 times, and steady free cash flow mean Eagle can fund its peak capital program and keep buying back stock without stress. The aggressive share-count reduction is the clearest evidence that management sees the cash generation as durable. What the balance sheet cannot do is change the cyclical math: the price rests on current margins holding, and the most predictable thing about cyclical margins is that they do not hold forever. The buyer is underwriting the durability of a peak, not a discount to intrinsic value.

Catalysts

Fiscal 2026, which ended in March, was a record year with a split underneath it. Eagle Materials reported record annual revenue of $2.3 billion, up 2%, and record fourth-quarter revenue of $479 million, also up 2%, but annual earnings per share fell 4% to $13.16. The divergence was by segment: heavy materials revenue rose 10% on an 8% increase in cement volume and a 70% jump in aggregate volume from acquisitions, while light materials revenue fell 9% on weaker gypsum wallboard volume and prices.

The forward catalysts are pricing and capacity. Cement price increases took effect across most markets on April 1, and a wallboard increase was announced for June 1, attributed to higher freight costs. On the capacity side, the Mountain Cement modernization is about 60% complete with commissioning targeted for late 2026, and the Duke Wallboard facility is about 30% complete with commissioning in the second half of 2027, pushing fiscal 2027 capital spending to a peak of $490 to $525 million. Analyst sentiment is cautious, with a Hold consensus and an average target in the low-to-mid $240s. The catalysts that matter are whether the cement price increases stick, whether wallboard demand stabilizes, and the trajectory of housing starts, all of which determine whether the record fiscal 2026 was a high point or a base.

Peer Cohorts (Per Segment, With Filing Citations)

Cement (reported)

Concrete and Aggregates (reported)

Gypsum Wallboard (reported)

Recycled Paperboard (reported)

Methodology Note

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.

Sources

Q4 FY2026 results, May 2026 · analyst consensus, 2026

View the full interactive EXP report on boothcheck