Knife River's Input Costs May Impact Contract Volumes Towards End of Construction Season, RBC Says
MT newswire2026/10/09 15:2411:24 AM EDT, 10/09/2026 (MT Newswires) -- Knife River's (KNF) input costs may impact contract volumes towards the end of the construction season, with input cost inflation presenting as a headwind for the US heavyside sector in general, RBC Capital Markets said in a Friday research note. RBC expects H2 contracting services margin to be between 9% to 10% on account of continuing headwinds like fewer public bid lettings driving competition, lesser higher-margin late season bidding opportunities, and delays to major projects, according to the note. Additionally, diesel prices represent headwind to Q3 revenue, as diesel costs have increased about 40% since early July, RBC said. Regarding the open letter from Starboard to the board of Knife River, RBC said it disagrees that the current management team is failing investors, while events outside the company's control have impacted the speed of progress. "We don't agree with all the views of the activist investor Starboard, but we do believe it may weigh on the performance of the shares," RBC analysts further said. RBC downgraded its rating on the stock to sector perform from outperform and lowered its price target to $58 per share from $103. Price: 49.93, Change: -2.34, Percent Change: -4.48
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