Analysts at KeyBanc Capital Markets maintain their “hold” rating on Texas Industries Inc (TXI).
Recent checks indicate that TXI’s cement shipments and selling prices would be under pressure, specifically in Texas, in the near term. With weather extremely wet in Texas during September and October, the total shipping days for cement reduced drastically, KeyBanc Capital Markets said. KeyBanc Capital Markets believes that cement prices will remain weak in California and Texas until there is a continuous and consistent increase demand.
According to KeyBanc Capital Markets, the consensus expectations are for a recovery in the second half of calendar 2010, with stabilization in prices expected after two three quarters. KeyBanc Capital Markets suspects the price-cost spread to be tightening, raising input costs. However, there are no near-term liquidity issues with Texas Industries and TXI’s shares are being valued based on the company’s asset base.