Stephens raised its price target on Knife River Corp. (NYSE: KNF) to $105 from $86 and reconfirmed an Overweight rating on Tuesday after the company reported a fourth quarter that beat expectations across its major product lines.
The investment firm highlighted robust volume and steady pricing in aggregates and ready-mix concrete as the primary drivers of the outperformance. Knife River delivered an adjusted EBITDA margin of 15.8% for the quarter, above Stephens' internal estimate of 14.4% and the Street consensus of 14.7%.
Not all segments contributed equally. Stephens noted that results from contracting services and liquid asphalt were weaker than anticipated, which partly offset the margin gains seen in aggregates and ready-mix.
Looking to 2026, Knife River provided sales and EBITDA guidance that exceeded consensus expectations, although the implied EBITDA margin guidance was modestly below analysts' estimates. The companys 2026 outlook includes an assumption of flat year-over-year EBITDA in Oregon, an expected 200 basis point improvement in aggregates gross margin, and higher gross margins across all product lines.
The guidance explicitly projects mid-single-digit percentage increases in aggregates price and volume, along with mid-teens percentage growth in ready-mix concrete volume. Knife River attributed much of the ready-mix volume growth to the Texcrete acquisition.
Stephens said it remains encouraged by Knife Rivers prospects for a return to underlying margin improvement, particularly within aggregates and the broader materials business in 2026.
In its quarterly financials for the fourth quarter of 2025, Knife River reported earnings per share of $0.56, topping the forecasted $0.41 and delivering a 36.59% surprise versus the estimate. Revenue for the quarter came in at $755.1 million, ahead of the projected $651 million, representing a 15.99% revenue surprise. These results underscored the companys strong operational performance for the period.
Investors and market participants will likely weigh the companys segment-level dispersion in profitability alongside the upbeat volume and pricing trends when assessing near-term momentum. The strength in aggregates and ready-mix underpinned the analyst action, while areas such as contracting services and liquid asphalt remain watch points.