For Summit Materials Inc. [SUM], JP Morgan sees a rise to $20. What next?

Summit Materials Inc. [NYSE: SUM] traded at a high on 09/04/20, posting a 0.53 gain after which it closed the day’ session at $15.08. The company report on July 27, 2020 that Summit Materials Announces Pricing of $700 Million of 5.25% Senior Notes Due 2029.

Summit Materials, Inc. (NYSE: SUM, “Summit”) announced today that its indirect subsidiaries Summit Materials, LLC and Summit Materials Finance Corp. (the “Issuers”, and, together with Summit, the “Company”) finalized the terms of the previously announced offering of $700.0 million aggregate principal amount of Senior Notes due 2029 (the “notes”). Summit anticipates that consummation of the offering will occur on August 11, 2020, subject to customary closing conditions. The Company intends to use the proceeds from the offering to redeem all $650.0 million in aggregate principal amount of its outstanding 6.125% Senior Notes due 2023 (the “2023 Notes”) and to pay fees and expenses incurred in connection with the offering and the redemption of the 2023 Notes. Any remaining net proceeds will be used for general corporate purposes, including to finance acquisitions.

The notes offered have not been and will not be registered under the Securities Act of 1933, as amended (the “Securities Act”), or any state securities laws and, unless so registered, may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. The notes will be offered, by the initial purchasers, only to persons reasonably believed to be qualified institutional buyers in reliance on Rule 144A under the Securities Act and non-U.S. persons in transactions outside the United States in reliance on Regulation S under the Securities Act.

The results of the trading session contributed to over 1345306 shares changing hands. Over the past one week, the price volatility of Summit Materials Inc. stands at 5.54% while the volatility over the past one month is 4.38%.

The market cap for SUM stock reached $1.71 billion, with 114.11 million shares outstanding and 113.52 million shares in the current float. Compared to the average trading volume of 1.14M shares, SUM reached a trading volume of 1345306 in the most recent trading day, which is why market watchdogs consider the stock to be active.

What do top market gurus say about Summit Materials Inc. [SUM]?

Based on careful and fact-backed analyses by Wall Street experts, the current consensus on the target price for SUM shares is $21.56 per share. Analysis on target price and performance of stocks is usually carefully studied by market experts, and the current Wall Street consensus on SUM stock is a recommendation set at 2.00. This rating represents a strong Buy recommendation, on the scale from 1 to 5, where 5 would mean strong sell, 4 represents Sell, 3 is Hold, and 2 indicates Buy.

JP Morgan have made an estimate for Summit Materials Inc. shares, keeping their opinion on the stock as Overweight, with their previous recommendation back on August 06, 2020. The new note on the price target was released on July 23, 2020, representing the official price target for Summit Materials Inc. stock. On April 30, 2020, analysts decreased their price target for SUM shares from 18 to 17.

The Average True Range (ATR) for Summit Materials Inc. is set at 0.73, with the Price to Sales ratio for SUM stock in the period of the last 12 months amounting to 0.75. The Price to Book ratio for the last quarter was 1.19, with the Price to Cash per share for the same quarter was set at 2.23. Price to Free Cash Flow for SUM in the course of the last twelve months was 8.34 with Quick ratio for the last quarter at 1.80.

How has SUM stock performed recently?

Summit Materials Inc. [SUM] fell into the red zone at the end of the last week, falling into a negative trend and dropping by -2.65. With this latest performance, SUM shares dropped by -7.60% in over the last four-week period, additionally plugging by 5.90% over the last 6 months – not to mention a drop of -29.57% in the past year of trading.

Overbought and oversold stocks can be easily traced with the Relative Strength Index (RSI), where an RSI result of over 70 would be overbought, and any rate below 30 would indicate oversold conditions. An RSI rate of 50 would represent a neutral market momentum. The current RSI for SUM stock in for the last two-week period is set at 43.57, with the RSI for the last a single of trading hit 40.25, and the three-weeks RSI is set at 44.69 for Summit Materials Inc. [SUM]. The present Moving Average for the last 50 days of trading for this stock 16.29, while it was recorded at 15.15 for the last single week of trading, and 17.87 for the last 200 days.

Summit Materials Inc. [SUM]: Deeper insight into the fundamentals

Operating Margin for any stock indicates how profitable investing would be, and Summit Materials Inc. [SUM] shares currently have an operating margin of +9.23 and a Gross Margin at +21.54. Summit Materials Inc.’s Net Margin is presently recorded at +2.66.

Return on Total Capital for SUM is now 6.25, given the latest momentum, and Return on Invested Capital for the company is 1.82. Return on Equity for this stock inclined to 4.29, with Return on Assets sitting at 1.49. When it comes to the capital structure of this company, Summit Materials Inc. [SUM] has a Total Debt to Total Equity ratio set at 136.56. Additionally, SUM Total Debt to Total Capital is recorded at 57.73, with Total Debt to Total Assets ending up at 47.92. Long-Term Debt to Equity for the company is recorded at 134.29, with the Long-Term Debt to Total Capital now at 56.77.

Reflecting on the efficiency of the workforce at the company, Summit Materials Inc. [SUM] managed to generate an average of $9,844 per employee. Receivables Turnover for the company is 8.90 with a Total Asset Turnover recorded at a value of 0.56.Summit Materials Inc.’s liquidity data is similarly interesting compelling, with a Quick Ratio of 1.80 and a Current Ratio set at 2.40.

Earnings analysis for Summit Materials Inc. [SUM]

With the latest financial reports released by the company, Summit Materials Inc. posted 0.5/share EPS, while the average EPS was predicted by analysts to be reported at 0.72/share. When compared, the two values demonstrate that the company fail the estimates by a Surprise Factor of -30.60%. The progress of the company may be observed through the prism of EPS growth rate, while Wall Street analysts are focusing on predicting the 5-year EPS growth rate for SUM. When it comes to the mentioned value, analysts are expecting to see the 5-year EPS growth rate for Summit Materials Inc. go to 7.00%.

Insider trade positions for Summit Materials Inc. [SUM]

There are presently around $1,852 million, in the hands of institutional investors. The top three institutional holders of SUM stocks are: FMR LLC with ownership of 13,668,248, which is approximately 40.852% of the company’s market cap and around 0.56% of the total institutional ownership; VANGUARD GROUP INC, holding 10,510,992 shares of the stock with an approximate value of $158.51 million in SUM stocks shares; and BLACKROCK INC., currently with $134.41 million in SUM stock with ownership of nearly 2.666% of the company’s market capitalization.

Positions in Summit Materials Inc. stocks held by institutional investors increased at the end of July and at the time of the July reporting period, where 96 institutional holders increased their position in Summit Materials Inc. [NYSE:SUM] by around 14,059,870 shares. Additionally, 97 investors decreased positions by around 13,404,707 shares, while 27 investors held positions by with 95,339,674 shares. The mentioned changes placed institutional holdings at 122,804,251 shares, according to the latest SEC report filing. SUM stock had 30 new institutional investments in for a total of 1,820,550 shares, while 38 institutional investors sold positions of 3,028,874 shares during the same period.

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