Vulcan Materials Company
Analysis
Vulcan has sold its way down to a pure-play aggregates business that now earns more per ton than ever, while the two markets that matter, public highway work and data centres, have turned up. It hangs on whether price can outrun fuel costs in the second half. How does the $20 per ton target split between price and volume?
- Vulcan now earns more per ton than it ever has.
Cash gross profit per ton passed $12 in Q2 FY2026, past the target set in 2022, with a $20 target now in front of the company. Fuel costs of $40 million hit the same quarter, so the gain came from price and better-run plants, not more rock. How much of the per-ton gain came from price versus cost cuts?
- Demand has turned up, but only in two of three markets.
Highway work and data centre construction are both growing, with more than half the federal highway money still unspent. Single-family housing has not turned, so shipments grew in Q1 and barely in Q2 — a recovery missing its biggest piece.
- Rising fuel costs outran Vulcan's prices in the first half.
Diesel jumped after the Middle East conflict, turning unit costs from flat to mid-single digits while January's prices were already fixed. Management's answer is price. If price does not outrun cost this year, guidance is what moves. How much of the 2026 guidance assumes diesel prices fall back?
- The price increases keep landing. The quarries are already paid for, so each extra dollar a ton sells for drops almost straight through to profit.
- Public work already funded keeps converting into shipments. Over half the current highway money is still unspent, so work keeps coming whether or not Congress passes a new bill.
- Operating discipline keeps taking cost out of making a ton. Vulcan's plants improve whether or not demand does, so profit per ton can rise on the same equipment.
- Diesel stays high while this year's prices are already set. Fuel costs hit right away while the price that covers them only resets later, so the gap cuts into profit for months.
- Single-family housing does not recover. Housing is the biggest missing piece of demand, so without it volumes stay flat, just as management's guidance assumes.
- Data centres keep skewing shipments towards cheap base stone. Base stone sells for far less per ton than finished product, so shipments can rise while price growth looks soft.
| Politician | Transaction | Amount | Traded | Filed |
|---|---|---|---|---|
Donald Trump Republican · Executive | Sale | ≥$15K | Jul 23 | Sep 22 |
Donald Trump Republican · Executive | Sale | ≥$1K | May 11 | Jul 1 |
Donald Trump Republican · Executive | Sale | ≥$1K | Mar 26 | May 13 |
Donald Trump Republican · Executive | Purchase | ≥$15K | Mar 25 | May 13 |
Donald Trump Republican · Executive | Purchase | ≥$1K | Mar 23 | May 13 |
Congressional trading data provided by QuiverQuant
How Vulcan Materials Company turned $7.9B of revenue into $1.6B of operating income.
| Revenue | ||
|---|---|---|
| Aggregates | $6.3B | ▲ 5.84% YoY |
| Asphalt | $1.3B | ▲ 3.92% YoY |
| Concrete | $846.6M | ▲ 29.55% YoY |
| Total revenue | $7.9B | |
| Gross profit | $2.2B | 27.4% |
| Operating income | $1.6B | 20.4% |